The Industrial Development of Poland

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Foreword

Although the subject of the following treatise is a very specialized one, we nonetheless believe that it may be of more than slight interest to the Western European reader, for several reasons. Today economic questions stand in the forefront of the intellectual life of all civilized countries; they have already been recognized as the mainspring of all social being and becoming. The political physiognomy, the historic destiny of a country is a sealed book to us if we do not know about its economic life, with all the resulting social consequences.

It was not long ago that Poland’s name echoed throughout the whole civilized world, that its fate stirred every soul and provoked excitement in every heart. Lately one no longer hears very much about Poland – since Poland is a capitalist country. Do we now want to know what became of the old rebel, where historic destiny steered it? – the answer can only be given through investigation of its economic history during the last decades. The so-called Polish question can be observed and discussed from several standpoints, but for those who recognize that the material development of a society is the key to its political development, the Polish question can only be solved on the basis of Poland’s economic life and its tendencies. We have endeavored to collect the existing material for the solution of the problem in the following discussion, and to arrange it as clearly as possible, at the same time permitting ourselves some direct observations of a political nature here and there. So this topic, which at first glance might appear dry and specialized, may be of some interest to the politician as well.

But for still other reasons. We live in a time when the powerful Empire of the North plays an ever more important role in European politics. All eyes are turned persistently toward Russia, and the alarming progress of Russian policy in Asia is watched with apprehension. Probably it will soon be a secret to no one that even the most important capitalist countries must sooner or later prepare themselves for a serious economic rivalry with Russia in Asia. Thereforethe economic policy of the Czarist empire surely cannot be a matter of complete indifference to Western Europeans. Poland, however, constitutes one of the most important and most progressive industrial districts of the Russian Empire, in fact one in whose history the economic policy of Russia finds perhaps its clearest expression.

The material for our work lay strewn in countless and, in many cases, contradictory statistical works, polemical brochures, newspaper articles, official and unofficial reports; a thorough study of the history of Polish industry as a whole, and in particular of its present position, is to be found in neither the Polish nor the Russian or German literature. Accordingly, we believed that this raw and fragmentary material had to be digested and presented in the most finished possible form, in order to bring the reader to general conclusions as smoothly as possible.

Part 1: The History and Present State of Polish Industry

1.1 The Manufacturing Period, 1820-1850

Political events moved Poland into a completely new situation at the beginning of the nineteenth century. The partition brought it out of the peculiar natural-economic, feudal-anarchic conditions of the republic of the nobles which we find in the Poland of the eighteenth century, and placed it under the rule of enlightened absolutism and under the centralized bureaucratic administration of Prussia. Austria, and Russia. The Russian section of Poland, which interests us here, admittedly maintained its own corporative constitution while still the Duchy of Warsaw and later after the Vienna Congress. But it was as different from the old Poland as heaven from earth, and the whole administrative, financial, military, legal government apparatus was tailored to a modern centralized state. The latter found itself in the harshest contradiction with the economic relations on which it had been grafted.

Poland’s economic life, as before, was concentrated on land ownership. The development of urban handicraft begun in the thirteenth century had crumbled to dust by the seventeenth century; the attempt by the magnates to start up manufacturing at the end of the eighteenth century disintegrated likewise. The system of land ownership, however, was utterly unsuited to serve as the basis of a modern state organization. Its dependence on the world market, which dated from the fifteenth century in old Poland, drove it to an extremely extensive latifundia economy and the utmost exaction of forced labor; it became more and more irrationally cultivated and as a result more and more unproductive. The wars during Poland’s last epoch, then the Napoleonic system in the Duchy of Warsaw, the Continental Blockade and with it the decline of grain exports, the drop in grain prices, the abolition of serfdom in 1807, all these blows rained down on landed property in the course of approximately ten years and brought it to the brink of ruin. Since it wasmeanwhile the main source of revenue in the country, the relatively high cost of the country’s new administration had to fall on it full force. The ten per cent income tax on landed property, already introduced in old Poland but only now actually collected, was now to be raised to 24 per cent. The burden of quartering soldiers and providing supplies for the military in natura fell on the nobility in addition.

The result was that landed property soon fell into the clutches of usury. While old Poland possessed no urban capitalist class as a result of the decay of urban production and trade, such a class surfaced right after the partition of Poland. In part it consisted of immigrating officials and usurers, in part of Polish parvenus who owed their material existence to the country’s great political and economic crisis. This new layer of the population now supplied the needy nobility with capital. To a large extent, however, the beginning of the nobility’s indebtedness dated from the ten years of Prussian rule (1796-1806), during which an organized agricultural credit was widely offered to the Polish nobility for the first time.

For Polish landed property this meant a real revolution. What was accomplished in Western European countries during the Middle Ages through a slow and persistent process over centuries – the disintegration of patrimonial land ownership through usury – was now achieved in Poland, where landed property had kept itself free from usury until the end of the Republic, in less than 20 years. Already in the year 1821 it had to be rescued from downfall by the government of the Kingdom by means of an exceptional measure:the moratorium.

Under such circumstances, the deficit became a permanent phenomenon in the Kingdom’s budget right from the beginning. The creation of new sources of revenue for the exchequer and of new spheres of economic activity in the country therefore became a condition of existence for the Kingdom from the first moment. Following the example of other countries and driven by immediate needs, the government undertook the establishment of urban industry in Poland.

The decade 1820-1830 is the period of the rise of Polish industry, or, more correctly, of Polish manufacture.

It was quite similar in character to the earlier rise of Polish handicraft by the method of attracting foreign, mainly German craftsmen. Just as in the thirteenth century the Polish princes tried to entice foreign workers to Poland with a variety of privileges, so also the government of Congress Poland. A whole series of Czarist ukases relating to this were proclaimed in the years 1816 to 1824. The government provided houses and made building materials available gratis, gave rent exemptions, founded the so-called iron fund for the construction of industrial buildings and housing for industry. In 1816, immigrating craftsmen were promised freedom from all taxes and public charges for six years, their sons were freed from military service, and the duty-free import of their property was permitted. In 1820 the government granted the immigrants a free supply of building materials from the state forests and constructed its own brickyards in order to supply them with the cheapest possible bricks.

A law of the year 1822 freed all industrial enterprises from the obligation to quarter soldiers for three to six years. In 1820 and 1823 it was decreed that the cities were to hand over locations to these enterprises rent-free for six years. The industrial fund established in 1822 for the encouragement of industrial colonization amounted to 45,000 rubles at the beginning, already twice as much in 1823, and from then on 127,500 rubles annually.

Such manifold attractions did not fail to have an effect. Soon German craftsmen trooped into Poland and settled down. Approximately 10,000 German families immigrated in a few years at this time. In this way, the most important industrial cities of today soon arose: Lodz, Zgierz, Rawa, Pabianice, and others. In addition to craftsmen, the government of Russian Poland called in prominent foreign industrialists to direct its enterprises: Coqueril from Belgium, Fraget, Girard, and others. Russian Poland’s government did not content itself with the granting of privileges to immigrants and the establishment of German manufacturing towns, however. Unlike the handicrafts of the Middle Ages, manufacturing could not content itself with the narrow circle of consumption and circulation within any one city; to start with, it required a wholesale market and, further, commodity circulation embracing the whole country at least. Together with the foundation of manufacturing colonies, the government had to undertake a whole series of administrative and legislative reforms which were to unify the country economically into one complex and create the necessary legal forms for internal commodity traffic. The greatest breach in the property relations and especially the landed property relations of old Poland had already been forced by the Code Napoleon introduced in the Duchy of Warsaw in 1808. It had grafted the legal forms of a modern bourgeois economy in quite finished form onto the economic conditions of a purely feudal natural economy. Unable to reorganize the means of production as such in the slightest, it had nevertheless severely violated the old property relations and so hurried their disintegration. With the abolition of perpetual rent, entail, etc., landed property was torn out of permanence and catapulted into circulation. At the same time, the Code Napoleon supplied commerce and the commercial courts with legal standards. In 1817, furthermore, chambers of commerce and manufacturing were established and the regulation of trade was brought to a close; in the following year, deed registries were introduced; in 1825, the Agricultural Credit Association was founded. In 1819, the building of highways and the regulation of waterways were begun by order of the state, and in 1825, the construction of the canal between the Niemen and the Vistula.

Finally, the government also took the lead – as in other countries at the beginnings of manufacture – with its own industrial enterprises, and established model factories, model sheep-raising, and so on. But it gave the strongest foothold to budding manufacturing by establishing the Polish Bank, which was called into existence by the Czarist ukase of 1828 and organized after the model of the German Seehandlung and the Belgian Société generale. This was an issuing, investment, deposit, mortgage, commission, and industrial bank all at once. Initially endowed with a fund amounting to 3 million rubles, it also obtained deposits, securities, ecclesiastical funds, fire insurance, pensions, and other capitals on deposit, which by 1877 represented 282 million rubles total. The bank offered credit to industry as well as to agriculture. In the period of 50 years since its founding, it had given commercial and industrial enterprises alone credit to the amount of 91 million rubles. The activity of the bank was extremely diverse. It not only established factories itself and carried on mining and agriculture, but also attended to means of transport. The first Polish train line, Warsaw–Vienna, of 1845 was chiefly the work of the Polish Bank.

The activity of the government sketched above was the first important factor in the development of industry in Russian Poland. Whatever other circumstances may have additionally influenced its history, it unquestionably owes its existence to the initiative and efforts of the government.

We see of course – as was said – that in other countries, for example France and Germany, governments stand by the cradle of manufacturing and take hold of its destiny with energetic hands. But there the governments offered their help only to a natural development of urban production, which moved of itself and by virtue of objective factors such as the accumulation of trading capital, the widening of markets, and the technological development of handicraft toward transformation into manufacturing production methods. In Poland, manufacture, like urban handicraft earlier, was a foreign product imported in finished form, which could develop neither a technological nor a social connection to Poland’s own economic development. Here, then, the activity of the government was the only positive factor in the rise of manufacture, and this explains to us the predilection which Polish economists and publicists have for reverting to this point; thus its significance is on the whole only too often overestimated. Above all, they forget that the autonomous Polish government, in the activity that they describe, acted in the most intimate agreement with Russian Czarism, which was guided by intentions which were in national terms nothing less than friendly toward Poland.

Furthermore, from the first, the assistance of Russian Poland’s government fell on the most favorable soil: Poland’s tariff relations. The Vienna Congress Act resulted in two important measures for Poland in this connection: First, it was united with Russia. Second, free trade with the other sections of what was formerly Poland, or what in fact meant the same thing, with Germany and Austria, was secured. As far as the union with Russia is concerned, the trade relations between the two countries were regulated by the tariffs of 1822 and 1824 so that their products were exchanged with each other almost duty-free.

The meaning of this new regulation for Poland only becomes clear, however, if it is kept in mind that since the year 1810, and especially under the administration of Kankrin, Russia adhered to an extreme prohibitive policy toward Europe, often bordering on absurdity, and was protected on all sides from foreign manufacture by an unbreachable tariff wall. Through the unification with Poland, Russia was now made accessible to German goods from this side, because of the above-mentioned tariff. The result of this for Poland was that it became the workshop for the processing of half-finished German goods, most of which were imported into Russian Poland duty-free, finished in Poland, and which then found their way into Russia as Polish products, again almost duty-free. By such means Poland’s large cloth industry, in particular, came into full bloom in only a few years.

First established in the years 1817 to 1826, it had already, in 1829, reached the for that time considerable amount of 5,752,000 rubles’ worth of production. That this surprisingly rapid growth was almost entirely thanks to Russian consumption is shown by the following table of exports of wool products to Russia, in thousands of rubles:

1823:		1,865
1825:		5,058
1827:		7,218
1829:		8,418

If the value of exported products according to this table exceeds the value of that produced in the country, this is because of the fact that, along with goods finished in Poland, German finished products smuggled into Poland were massively exported to Russia under Polish labels. But this tariff relationship had still another important side for Congress Poland. It opened to her a free trade route to China, where Polish cloth was likewise exported in large quantities. This export specifically amounted to (in thousands of rubles):

1824:		331
1826:		332
1828:		1,024
1830:		1,070

Although Poland’s whole export trade in the first decade of its industrial development really extended to only one branch, the wool industry, yet its importance for the country was great, for it also had invigorating repercussions on other branches of production and strongly encouraged the immigration of German craftsmen. A historian of the Polish textile industry center, the city of Lodz, calls Poland’s cloth trade of that time with Russia and China “the mainspring of the development of industry.”

Yet in 1831 this trade came to an end. The Polish uprising, which paralyzed the development of manufacture in the country for some time, in addition had as a lasting effect that in this year the tariff between Poland and Russia was significantly increased. The competition of Polish cloth in Russia and China had been a thorn in the side of Russian manufacturers for a long time. Their repeated petitions to increase tariffs at the Polish border remained unsuccessful, however, until the uprising of 1831 and with it the standstill of Polish cloth exports to Russia. This furnished the Russian manufacturers with the opportunity to quickly take the deserted field by expanding their own production and so prove to the government with figures how much the “Fatherland’s” industry had suffered from Polish competition until then. With the raising of the tariff and, at the same time, the abolition of free transit to China, Polish exports sank rapidly:

In 1834, they amounted to a total of 2,887,000 rubles, of that manufactured products 2,385,000 rubles. In 1850, they amounted to a total of 1,274,000 rubles, of that manufactured products 755,000 rubles.

For Polish wool production, this was a hard blow. After its value had reached, in 1829 – as we saw – the height of 5,752,000 rubles, it sank in 1832 to 1,917,000 and rose only little by little to 2,564,000 rubles in 1850, that is, to half of the earlier amount.

Yet the closing of the Russian border could have no great significance for the further destiny of Polish manufacturing as a whole. The conditions for a growing demand for manufactured goods did not then exist in Russia itself, nor were the means of transport adapted to mass transport. The large cloth export trade can be explained in the main only by the needs of the Russian Army. Moreover, Polish manufacturing had still not even had time to provide itself with an internal market. So after the closing of the Russian customs border, it slowly set out to get a foothold within the country, with favorable government measures and supported in particular by the Polish Bank. In the next two decades many branches of production developed well: in the 1830s tanning and soap-making, in the 1840s sugar production, also mining in the 1830s and similarly paper manufacturing. But the country’s social situation drew rather narrow bounds for the growth of industry. Totaling only the tiny number of 4 to 5 million people, the population of Russian Poland moreover lived in large part within a natural economy. Despite the abolition of serfdom in 1807, forced labor remained the predominant mode of labor in agriculture and as a result the property owners, just like the peasants, were cut off from commodity and money exchange to a great degree. The cities grew only slowly and, poor and underpopulated as they were, could not provide a strong demand for manufactured goods either. This development is thus really a very slow one. Thirty years after Polish manufacture arose, after a period in which it had been mainly directed toward its own internal market, we see that it is still restricted to quite dwarfish dimensions. The most advanced of all industries, textiles, was still mainly run with manual labor in the 1850s, without steam power, and therefore only by skilled master craftsmen and journeymen and without a trace of female labor. On the whole the fragmentation of production points to its predominantly craft character, for in the year 1857 we still see 12,542 “factories” in Poland with 56,364 workers and 21,278,592 rubles’ worth of production: on the average, four to five workers and 1,700 rubles’ worth of production per “factory.”

Corresponding to this situation, urban industry also played only a secondary role in Poland’s social life until the 1850s and even the 1860s. Landed property still set the tone in the economy as well as the politics of the country. Indeed, the broad mass of middle landowners, those who at the time represented public opinion, regarded budding urban industry and with it the capitalist economy as a foreign and poisonous weed, as a “German swindle” that bore the guilt for the desperate condition of landed property and of the whole country.

1.2 The Transition to Large-Scale Industry, 1850-1870

We have become acquainted with the first beginnings and development of industry in Poland within the internal market. We have seen that it owes its start to the efforts of the government, and that as a result of the limited internal market it was not able to divest itself of the manufacturing form even into the 1850s. But here the first epoch of its history ends, and a new page begins. Beginning in the 1850s a series of new circumstances arose which, although in themselves very diverse, ultimately had the effect that the Russian market was opened up to Polish production, which was thus assured a mass market. This gradually brought about a complete revolution in Polish industry and transformed it from manufacture into genuine mass-production, large-scale industry. Therefore we can characterize the second period of its history as the period of large-scale industry. The decades 1850-1870 constitute the transition period from the first to the second phase.

Four important factors revolutionized Polish industry in this period.

First, the abolition of the customs-barrier between Russia and Poland. In the year 1851 Poland’s tariff relations were remodeled in two ways. On the one hand, the tariff which until then had cut Poland off from Russia was set aside; on the other, an end was made of Poland’s independent policy on trade coming in from outside, and Poland was admitted into the Russian tariff zone. In this way, Poland has formed a single whole with Russia in reference to trade ever since. For Poland, the great significance of the tariff reform of 1851 lay first of all in the fact that completely free export trade to Russia was now possible. So Polish manufacture had the prospect of producing for a mass market, of overstepping the narrow limits of the domestic market and becoming real mass-production industry. However, this result could only take effect after a long period of time. At the moment when the tariff barrier between Poland and Russia was set aside, three important hindrances still stood in the way of a real mass export of Polish manufactures to Russia. First, since it had until then been adjusted mainly to the demands of the domestic market, manufacture in Poland was still not capable of the rapid expansion by leaps and bounds which characterizes large-scale mass-production industry to such a great extent. Second, no modern means of transport existed between Poland and Russia; third, the domestic market in Russia was also of limited dimensions, restricted by the persistence of serfdom and of natural economy. But soon a complete transformation occurred in all three areas.

Certainly the Crimean War had a revolutionizing effect on Polish as well as on Russian manufacturing. The blockade of Russia’s sea borders cut off the import of foreign goods for the most part, and the rest were redirected to the western land borders, to Poland, which became the route of lively trade traffic. But more important was the mass demand created by the needs of the Russian army, above all for products of the textile industry. In Russia the growth of the latter in the years 1856-1860 amounted to 11.6 per cent yearly for cotton spinning, 5.5 per cent for cotton weaving, and 9.4 per cent for dyeing and finishing. In Poland, an even greater jump is observable.

The value of production in thousands of rubles was:

		1854		1860		+%
in the linen industry		723		1,247		+72%
in the wool industry		2,044		4,354		+113%
in the cotton industry		2,853		8,091		+183%

The Crimean War period gave rise to a profound transformation in the technology of the textile industry as well: it brought about the introduction of the mechanical loom and the mechanical spindle in Russia and Poland. First, the now-gigantic Scheibler factory was founded in Lodz in 1854, with 100 looms and 18,000 spindles. The following year, the first mechanical linen spinning mill was established in Russia, and in 1857, the biggest and today still important linen factory in Poland, the Zyradow factory, was converted from a hand to a mechanical weaving mill.

The second important result was the establishment of a series of railway lines between Poland and the most distant parts of Russia. In 1862, Poland was connected with St. Petersburg, in 1866 with Wolynien, White Russia, and Podolien, in 1870 with Moscow, in 1871 with Kiev, in 1877 with southern Russia. Moreover, the feverish building of railway lines in inner Russia opened ever more areas to trade. The construction of each new railway line leading to Russia was followed by an increase in demand for Polish products and an expansion of production. Disregarding the depressive effects of the uprising of 1864 and the consequent temporary paralysis of trade with Russia, the decade 1860-1870, the period of the technological revolution in transport, had as a result that while the total value of Poland’s industrial production amounted to only 31 million rubles in 1851 (21 million, according to another source), it represented 73 million rubles (from both sources) in 1872, after 15 years – an increase of 135 per cent and 248 per cent respectively.

The third factor that contributed to the industrial revolution was the abolition of serfdom in Russia in 1861 and in Poland in 1864 and the resulting transformation of agriculture. Now robbed of the unpaid labor power of the villeins, the landowners turned to the employment of wage laborers and the purchase of industrial products which earlier they had made on their own estates. On the other side, the great mass of peasants consequently had money to spend, and also became buyers of factory goods. Connected with this was a tax reform and the beginning of the government’s policy of squeezing the Russian peasantry, which violently pushed even the small peasant onto the market with the products of his labor and, as it undermined the agricultural natural economy more and more, to that degree prepared the ground for a money economy and the mass market for manufactured goods. The other result of the reform was the proletarianization of broad layers of the peasantry, thus the “setting free” of a mass of workers who put themselves at industry’s disposal.

So in Russia we see a transformation of all social relations in connection with the Crimean War. The collapse of the old patrimonial land ownership and of natural economy, the reformation of taxation and finance, the establishment of a whole network of railways – all this meant the creation of markets, market channels, and workers for Russian industry. But since, in terms of trade policy, Poland formed a single whole with Russia ever since the tariff abolition of 1851, so Polish manufacture was swept into the whirlpool of Russia’s economic metamorphosis and was transformed by the rapidly growing market into real mass-production industry.

But at the end of the 1870s yet a fourth important factor supervened, which within a few years made Polish industrial production into large-scale industry, such as we see today in Poland, and this is Russia’s tariff policy.

1.3 The Period of Large-Scale Industry in Poland

Since the beginning of the century, Russia, as was mentioned, adhered to a highly protectionist policy. The Crimean War, however, caused a change here as in all other areas of social life. In the “liberal period” of the 1860s tariffs were significantly reduced. This free-trade turn did not last long, however. Because of the reforms themselves, especially the costly railroad construction, the government ran enormously into debt to foreign countries, and the gold tariff was introduced in 1877 with the object of getting hold of gold. With this, Russia entered onto a course of even stricter protectionist policies.

With the exchange rate of the paper ruble falling, the gold tariff meant an increase in the tariff rate of 30 per cent in the first years and of 40 to 50 per cent in following years. In 1880 a deficit in the state treasury developed once more as a result of the abolition of the salt tax. A general tariff increase of 10 per cent ensued in 1881 as a replacement. In 1882, several individual tariff rates were raised, such as those for linen, wool yarn, chemical products, dyes, etc.; in 1884, a repeated increase in various individual tariff rates occurred, for example that for silk yarn; in 1885, an almost general increase of the tariff of 20 per cent; in 1887, once again a partial climb in individual tariffs, and the same in 1891.

Obviously the purpose of protectionism, when not fiscal revenue, was above all protection of domestic industry from foreign competition.

The results of such a substantial forcing up of the tariff were twofold. First, the import of foreign manufactured and half-finished goods declined rapidly. The total imports over Russia’s European borders in millions of gold rubles annually amounted to:

1851-56		74
1856-61		120
1861-66		121
1866-71		212
1871-76		364
1876-81		326
1881-86		304
1886-91		224
1891		220
1892		219

The import of manufactured and half-finished goods, which were dutied much higher than raw materials, shrivelled up even more severely than the above table indicates. Thus a place was made in Russian markets for native – Russian and Polish – industry, which was freed to a great extent from foreign competition. The other natural result was the general climb in commodity prices. It has recently been calculated that the Russian consumer may pay much more for most commodities than, e.g., the German consumer; thus

for tea		304%
for tobacco		687%
for coal		200%
for paper		690%
for linen		225%
for cotton products		357%
for agricultural machinery		159%

As for the metal industry: a pood of wire nails of medium size, for example, costs an American 1 to 1.50 rubles, while a Russian pays 3.20 rubles in tariffs alone on these articles and 4 to 8 rubles for the whole product. In relation to the value of the most important metals, the tariff in 1896 made up: iron ore, 70 per cent; iron, 45 per cent; and steel, 35 per cent. Under such monopoly conditions Russian and Polish industry began to rake in colossal profits from the domestic market. We can get an approximate notion of these profits from the official statements of the manufacturers themselves. In 1887, for example, net profits were declared:

by the Russian Cotton Spinning Mills, St. Petersburg		15.0%
by the Moscow Manufacturing Company		16.0%
by the Balin Manufacturing Company		16.0%
by the Narva Linen Spinning Mill		18.0%
by the Sampson Cotton Spinning Mill		21.3%
by the Yekaterinhof Cotton Spinning Mill		23.0%
Rabeneck Cotton Dye Works		25.4%
by the Izmailov Cotton Spinning Mill		26.0%
by the S. Morosov Works		28.0%
Neva Cotton Weaving Mill		38.0%
by the Krenholm Works		44.9%
by the Thornton Wool Works		45.0%

From more recent times we have no less surprising statements of profits in the Russian metal industry. The metallurgical enterprises of the southern district yield on the average a profit of 50 per cent, the colossal works of the Englishman Hughes as much as 100 per cent. “Not without interest,” writes the Ministry of France’s official organ, “is the utilization of the profits obtained, which gives rise to the impression that the companies, faced with a downright excess of profits, are as it were uncertain what to do with them,” i.e., under which column in the official reports to enter the winnings so as to conceal their staggering size.

The influence of monopoly prices on the size of capitalist profits, together with the relationship of the latter to outlays for labor power, is most strikingly shown by the following little juxtaposition. The market price of raw iron in Kiev in July 1897 amounted to 85 kopeks per pood; of that, the costs of production in Russia made up 45 kopeks, including wages at 4 kopeks per pood – with a net profit of 40 kopeks. The relation of profits to cost of production and to wages was thus 10:11 and 10:1 respectively.

The profits of Polish entrepreneurs were in no way inferior to the enormous profits of the Russians, as we will see. For example, at the beginning of the 1890s the dividends of the sugar factories in Poland amounted to as much as 29 per cent. In the textile industry, 40 per cent profits were regarded as a normal phenomenon. But these official manufacturers’ statements are notoriously 30 to 50 per cent smaller than the profits actually obtained.

Thus, after all the main conditions of industrial development – a domestic market, means of transport, an industrial reserve army – had been called to life in the years 1860-1877, the supervening tariff policy created a hot-house atmosphere of monopoly prices that placed Russian and Polish industry in an absolute El Dorado of primitive capitalist accumulation. In the year 1877 an era of feverish enterprise and grandiose accumulation of capital began, combined with the bounding growth of production. The total picture of Poland’s industrial development under the effect of the relationships sketched above shows itself as follows:

In millions of rubles
	Total Production	Cotton Industry	Wool Industry	Linen Industry
1860	50.0 (1864)	8.1	4.3	1.2
1870	63.9	10.2	4.0	1.2
1880	171.8	33.0	22.0	5.0
1890	240.0	47.6 (1891)	35.5	6.5

The strongest upswing between 1870 and 1880 – for all industry +169 per cent, for the cotton industry +223 per cent, for the wool industry +450 per cent, for the linen industry +317 per cent – is chiefly a result of the first three years (1877-80) of the new era in tariff policy. As we will see below, the introduction of the gold tariff brought with it not only the sudden establishment of many new enterprises but also the transfer of a number of German factories from Saxony and Silesia to the western part of Poland. Of the largest factories which the official inquiry organized in 1886 found in Poland, 18.1% were founded before 1850,

6.8%		in 1850-60
13.6%		in 1860-70
29%		in 1870-80
32.5%		in 1880-86.

Thus 61 per cent of all large factories were established after 1870. As for the extent of production, in the period 1870-1890 it had almost sextupled in the textile industry as a whole. The following table shows quite specifically the influence of the tariff policy: of the most significant factories,

18.1%	were founded	before 1850,
37.2%		in 1850-1877
44.7%		in 1877-1886.

Thus almost half (today even more) of all the large factories in Poland originated since 1877 as direct results of the protectionist tariff policy. This expansion of production went handinhand with a revolution in the means of production themselves. Everywhere in place of the small, scattered factories appeared modern industrial large-scale enterprises with extensive use of steam power and the newest technical equipment in construction and operation. The concentration in industry in general in Poland presents itself as follows:

		1871		1880	1890
Number of workers		76,616		120,763	ca. 150,000
Value of production (in million rubles)		66.7		171.8	240
For one firm (in rubles)		3,239		8,063	71,248
For one worker (in rubles)		882		1,422	1,600

However here the average figures are, as usual, not suited to giving a true idea of the revolution taking place, since this was of course not accomplished equally in all branches of industry. Most characteristic are the figures for the textile industry. Here we find:

		1871		1880		1890
Number of factories		11,227		10,871		635
Number of workers		28,046		45,753		60,288
Production (in million rubles)		18.1		57.6		88.4
Workers per factory		2.5		4.2		95
Production per factory (in rubles)		1,612		5,303		139,298

But within the textile industry the cotton industry shows the revolution in the most vivid way:

		1871		1880		1891
Number of factories		10,499		3,881		163
Number of workers		19,894		19,576		26,307
Production (in million rubles)		10.4		30.8		47.6
Workers per factory		1.9		5		162
Production per factory (in rubles)		994		7,950		291,736

The surprising growth of the cotton industry can also be measured in the number of spindles. These amount to:

1836		7,300
1840		27,300
1850		61,300
1863		116,200
1870		289,500
1875		385,500
1879		449,600
1882		467,600
1888		ca. 600,000

According to other sources the number of spindles grew during a period of ten years (1877-1886) from 216,640 to 505,622, i.e., 134 per cent. In the same period, the number of spindles in the Russian cotton industry shows an increase of 32 per cent (in particular, 45 per cent in the Moscow district, 10 per cent in the Petersburg district); that in the North American industry (1881-1891), 30 per cent; and in the English, 8 per cent. The number of looms grew from 1877 to 1886: in the Russian cotton industry, 46 per cent (in particular. 50 per cent in the Moscow district, 25 per cent in the Petersburg district); but in Poland, 139 per cent. The use of steam power to a greater extent begins only in the 1870s, but since then it has grown quickly.

		1875		1890
Steam horsepower in industry as a whole		14,657		51,800
of that:
in the textile industry		4,220		26,772
in mining		1,803		10,497

In the branches on which an excise was not levied, steam horsepower almost doubled again in the two-year period from 1890 to 1892, growing from 41,303 to 81,346.

In 25 years, the whole outward appearance of the country had changed from the ground up. In the midst of this, the little town of Lodz quickly grew up into a large center of the textile industry, into a “Polish Manchester,” with the typical appearance of a modern factory city – countlesssmoking factory chimneys packed tightly one next to the other, a population made up almost exclusively of factory personnel, and a municipal life regulated by factory whistles, revolving exclusively around industry and trade. Here we find a series of giant establishments, among which the Scheibler factory, with its yearly production of 15 million and its 7,000 workers, claims first place. In the southwestern corner of the country, on the Prussian border, a whole new industrial area sprang up as though charmed out of the ground, where factories suddenly emerged amid forests and rivers, preceding the building of cities, with everything grouped around them from the beginning. In the old capital, Warsaw, the collection point for all handicrafts, handicraft greatly elevated itself. But at the same time it frequently fell under the domination of merchants’ capital. Small- and middle-sized independent workshops dissolved themselves into cottage industry, and large warehouses of finished handcrafted goods stepped into the foreground as collection points for small production. The trade of the whole country was concentrated from now on in the Stock Exchange and in countless banking and commission firms. Praga, a suburb of Warsaw, became the center of large-scale metal industry, and the gigantic Zyrardow linen factory in Warsaw, with its 8,000 workers, transformed itself into its own little city.

1.4 Poland’s Main Industrial Districts

Now that we have given a general summary of the development of Polish industry, it remains for us to illustrate this in detail in the individual histories of the most important branches of industry, and to sketch the outward local grouping of factory production.

If we disregard the scattered, insignificant factories to the right of the Vistula and along the Prussian border, the industry of the Kingdom of Poland is concentrated in three districts with strongly stamped physiognomies, different characters, and different histories.

The most important among them is the Lodz district. It includes the city of Lodz and its region, the cities of Pabianice, Tomaszow, and some districts of the Kalisch Gubernia. The production of this district amounted to 49 million rubles in 1885, and today at least 120 million. This is the real textile industry district. The history of its main center, Lodz, is extremely typical for all of Polish industry.

It would be difficult to imagine a less favorable place for the founding of an industrial city than Lodz. It lies in a treeless, waterless plain, in the midst of bogs that only about ten years ago lay on both sides of the main street here and there, so that in these places the city was barely 200 paces wide. The tiny Lodka River is completely fouled by factory waste, and all necessary water comes to the factories from artesian wells and ponds. In the year 1821 Lodz had only 112 houses with 800 inhabitants, But in 1823 colonization began, Silesian and Saxon clothmakers settled down, and by 1827 Lodz counted 2,840 inhabitants, among them 322 manufacturing workers. In 1837 it had more than 10,000, in 1840 18,600 inhabitants and over 1.1 million rubles’ production annually.

As a result of the increase of the Russian customs tariff in 1831, however, and the crisis which therefore occurred in cloth-making, the growth of the city was curbed, and the number of inhabitants even declined in 1850 to 15,600. But since the 1860s, as a result of the causes described above, which together amounted to the opening up of the Russian market, there begins for Lodz an epoch of rapid development that has become torrential since the 1870s. For in Lodz we see:

1860		32,000 inhabitants		and	2,600,000 rubles’ production
1878		100,000 inhabitants		and	26,000,000 rubles’ production
1885		150,000 inhabitants		and	36,500,000 rubles’ production
1895		315,000 inhabitants		and	90,000,000 rubles’ production

In the last 25 years, production in Lodz was also transformed. Up until the 1870s, cotton goods were made for a limited market, primarily for the well-to-do classes. But when the Russian market was opened to Polish industry and gradually a new class of customers, the working population, began to play the leading role in demand, the textile industry in Lodz had to adjust itself to the new customers. So the Lodz factories went over to the production of cheaper and simpler cotton goods, such as tricot and other crudely printed material, but above all to the production of fustian. Fabrication of this cloth was first transplanted from Saxony to the city of Pabianice in 1873. Today it dominates the entire production of the district, as the following figures show. Lodz manufactured:

		1881		1886
Lancort		29%		27%
Bjas		44%		29%
Fustian		10%		35%
Mitkal		5.5%		5%
Miscellaneous		11.5%		4%
		100.0%		100%

The sudden turn in the tariff policy in 1877 also called to life a new branch of the cotton industry in the Lodz district, namely the fabrication of so-called mixed yarn from cotton and wool (vignone). Until that time massively imported to Russia from Werdau and Crimmitschau, this product found its entry into Russia closed shortly after the introduction of the gold tariff. To circumvent this tariff wall, several factories were now transferred directly from Saxony to Lodz by German entrepreneurs, and by 1886 over 39,000 spindles of mixed yarn were manufactured here.

In this way the current configuration of the large cotton industry in the Lodz district appears as a product of the opening of the Russian market and of Russian customs policy in the 1870s.

The district’s wool industry is dominated no less by the same factors. The powerful jump in production from 4 millions in 1870 to 22 millions in 1880 shows what influence the Russian market exerted on this Polish industrial branch. As for wool spinning in particular, it owes its current development quite particularly to Russia’s customs policy. The introduction of the gold tariff in 1877 had the transplantation of many foreign spinning mills to Lodz as an immediate consequence; the largest, with 22,000 spindles, was founded in 1879 by Allart Rousseau Fils and is today still an affiliate of this firm in Roubaix, where it also obtains its half-finished goods. Since the 1870s, Poland became the source of supply of yarn for Russia, and its production in this branch surpasses the Russian by more than 217 per cent; in Poland it amounted to 18,749,000 rubles in 1890, in Russia 5,909,000 rubles. In the most recent periods, the customs policy has helped two other branches of the textile industry in Lodz – stocking and knitting mills – to blossom.

A still more interesting illustration of the effect of Russian customs policy on Polish industry is offered by the history of the second district, Sosnowiec.

This includes the southwestern part of the Piotrkov Gubernia, lying close to the Prussian border, and the cities of Czestochova, Bedzin, Zaviercie, Sielce, and Sosnowiec. While the Lodz district began its industrial development in the 1820s, the industry of the Sosnowiec district, as was mentioned, represents a phenomenon of quite recent date.

Up until the 1860s there was nothing to be seen here but miles of thick pine forests, but within 15 years this forest region transformed itself into a lively industrial area whose textile industry is already beginning to give serious competition to that of old Lodz.

Two important circumstances greatly favored the rapid development of industry in the Sosnowiec district. First, the cheapness of fuel. The southern part of the Piotrkov Gubernia forms the coal basin of Poland, and its nearness put young Sosnowiec industry in an outstandingly advantageous position in comparison with not only Russia but also the other parts of Poland. The average price of one pood of coal in the districts concerned, by place, amounts to:

Sosnowiec district	2.40 – 9.7 kopeks
Warsaw district	11.22 – 13.0 kopeks
Lodz district	11.50 – 14.9 kopeks

Second, the cheapness of labor. From the outset, this coal industry placed a contingent of “free” female labor power at the disposal of the factories of the district, in the persons of the members of the miners’ families. Here too the Sosnowiec district finds itself in a significantly more advantageous position than the Lodz district. Specifically, wages per month in rubles amount to:

		Sosnowiec District				Lodz District
		Men	Women	Children		Men	Women	Children
Finishing		13.50	10.75	8.50		26.00	18.0	9.75
Wool spinning		29.25	9.0	6.0		28.25	18.25	6.0
Mixed spinning		21.25	10.25	–		22.0	13.0	–
Cotton spinning		15.75	11.0	4.75		21.0	17.75	4.50
Average		20.0	10.25	6.25		24.30	16.6	6.7

The difference for the textile industry in Lodz in comparison with Sosnowiec amounts to + 21.5 per cent for men, for women + 61.9 per cent, for children + 4.7 per cent.

The real reason for the rise of industry in the Sosnowiec district, however, was the new era in Russian customs policy. Right after 1877 a whole series of Prussian and Saxon factories were simply moved from Germany to Poland. Considerable industry was soon concentrated in one zone of three Russian miles along the border. Of the 27 most significant factories that could be counted here in the vicinity of the border in 1886, five had been founded before 1877, 22 in 1877-1886 (81.5 per cent). The production of the factories in Sosnowiec amounted to half a million rubles in 1879, 13 million rubles in 1886, making an increase of 2,500 per cent in seven years.

The development of factory production in the Sosnowiec district went hand in hand with a surprising growth of the coal industry. Supported and, in the 1830s (1833-1842), even directly run by the Polish Bank, this industry developed quite slowly up until the 1860s and in 1860 produced a yield of 3.6 million poods of coal. Since this time, three important factors have come into play one after the other, which powerfully furthered the development of mining: first, the construction of railroads in the 1860s and 1870s; second, the development of factory industry; and third, the prohibitive tariff system. The upswing is expressed in the following figures:

Coal production, in millions of poods, was:

1860		3.6
1870		13.8
1880		78.4
1890		150.8

Thus, during the 20 years from 1870 to 1890, production increased by 993 per cent. The railroads form one of the most important buyers of coal. The Polish as well as the South Russian coal basins supply Russia’s railways with fuel. The consumption of the latter amounted to:

		In millions of poods
		1880	1885	1890
of South Russian coal		22.2	34.3	39.8
of Polish coal		10.8	13.8	17.5

But factory industry is a still more important buyer of coal. In 1890 the Lodz district alone used 30.6 million poods of coal, the Warsaw district 26 million, and the Sosnowiec district 40 million poods, in which the iron works played a great role. In 1893, coal consumption in Warsaw came to 35.5 million poods, in Lodz in the same year 36.2 million, and in the year 1896 41 million poods.

A new epoch in the Polish coal industry begins with the extension of the protective tariff policy to this branch of production in 1884, which hit the until then duty-free import of foreign coal with a tariff of one-half to two kopeks in gold per pood. The immediate result was a great “coal crisis” in Russia, i.e., a great coal shortage as a result of the backward methods of the Russian coal works and their inability to take the place of English coal with their own, relative to growing demand.

This was turned to the advantage of the Polish coal works, which rapidly expanded their activity and in a few years conquered all the important markets in Russia: Odessa, Moscow, St. Petersburg, even South Russia. Although the crisis has long since been overcome, Polish coal has since then beaten South Russian coal stepbystep out of the field in Russia, on the Moscow-Kursk, Moscow-Brest, Kiev-Voronesh, Fastow, St. Petersburg-Warsaw railway lines and in part on the southwestern lines. In 1894, 5,824,000 poods of coal came to Odessa from Poland, as against 5,300,000 from the South Russian basin.

It still remains to cast a glance at the district’s iron industry. This has a longer history behind it, for already in the Duchy of Warsaw in the year 1814 there were 46 blast furnaces for iron ore. Development proceeded so slowly, however, that up to the 1880s Poland had not brought this industry beyond a production of 2.5 million poods of raw iron, 1.4 million poods of iron, and 3.9 million poods of steel.

A new page in the history of the Polish iron industry begins with the turn in Russian customs policy. The brief free-trade period after the Crimean War lasted somewhat longer for iron than for other commodities, since the Russian iron works could not have satisfied the enormous demand created by railway construction even with the strongest protective tariff policy. But since 1881 the protective tariff has taken the place of free trade here, too, and after a gradual increase the customs rate was set in 1887 at 25 and 30 kopeks in gold per pood of raw iron, at 50 kopeks to 1.10 rubles for iron, and at 70 kopeks for steel; the tariff of 1891 brought a new increase in customs. As the immediate effect of the revision of the tariff we see the import of foreign metals to Russia decline in the following way:

		In millions of poods
		Raw Iron	Iron		Steel
1881		14.3	6.5		1.4
1891		7.1	5.0		1.0

Correspondingly, metal production in Russia and Poland grew – in the latter, as follows:

		In millions of poods
		Raw Iron	Iron and Steel
1860		0.7	0.3
1870		1.3 (100%)	0.6 (100%)
1880		2.4	5.5
1890		7.4 (+488%)	7.5 (+1054%)

The third industrial district, the Warsaw district, does not have so strongly stamped a physiognomy as the two already described. Here we find a great diversity of industrial branches, but the most important are machine production and the sugar industry. The history of the first is completely told in the following simple comparison. While until 1860 only nine factories producing agricultural machines existed in Poland, in 1860-1885 42 new ones were established. Here, as in all earlier cases, we see the same upswing as a result of the transformation of the market in the 1860s and 1870s.

Finally, let’s take a look at the history of the sugar industry. It had already made its start in the 1820s but until the 1850s was only a subsidiary branch of agriculture, of small dimensions and often run by the landowners themselves. The production of the 31 plants in operation in 1848 did not exceed 177,500 poods, amounting to no more than 5,000 to 6,000 poods per factory. The year 1854 shows the greatest number of sugar factories, when there were 55. Since the abolition of serfdom and the revolution in agriculture, sugar production severed itself from agriculture and became an independent branch of industry. The number of establishments gradually decreased through the simultaneous concentration of production. In 1870 we find still only 41 sugar factories with 1.2 million poods’ annual production.

But a true revolution was brought about in the sugar industry by the tax and customs policy of the Russian government. Namely, in 1867 the singular system of sugar taxation that had applied in Poland until then was annulled and replaced by that of the Russian Empire. The latter was based on taxation not of the finished product actually produced, but on the amount of finished product which was assumed to be produced in every factory, measured by the fixed standard productivity of the press apparatus.

In this form the sugar tax naturally became the spur to the improvement of production; it soon moved all sugar factories to introduce the diffusion method, which pushed productivity above the norm taken as the basis for the tax, making the nominal tax of 80 kopeks per pood in reality only 35 or even 20. In 1876, to encourage sugar exports, the rebate on the excise on exported sugar was ordered, which in view of the above circumstances came to the same thing as a colossal export subsidy. This was yet another spur to a feverish improvement of production methods and to expansion of production.

In a few years the sugar industry in Russia and in Poland transformed themselves into large-scale industry. While Russia had only exported 4 poods of sugar in 1874, sugar exports in 1877 already amounted to 3,896,902 poods, for which the government had to “refund” roughly 3 million rubles – half of the entire sugar excise levied in the Empire. In 1881 the government took steps toward thorough reform of taxation of the sugar industry, but in the meantime the industry had reached very high levels of technological development. In Poland there were:

In 1869-70 41 factories with 1.2 million poods’ production; In 1890-91 40 factories with 4.8 million poods’ production.

From this feverish expansion of production there followed a crisis in 1885, which brought in its wake the establishment of a sugar cartel embracing all of Russia and Poland and so imprinted this branch of production with the clearest stamp of a large-scale industry. One fruit of this cartel is the fact that Russian sugar, whose production cost amounts to one and five-sixths d per pound, is bought outside the Empire for one and two-thirds d, but in Kiev for four d per pound. No wonder that with such monopoly prices the sugar factories are able to yield enormous dividends. The foregoing picture of industry in Poland would not be complete if it were not at least supplemented with some information about the role of this industry in the economy of the Russian Empire in general and, in particular, in comparison with other important industrial districts. The significance of Poland and the two capitals of Russian factory production – St. Petersburg and Moscow – in terms of industrial activity can be generally represented by the following:

1890	Total Production (in millions of rubles)	Per Capita (in rubles)
Russian Empire	1,597	13.5
Moscow district	460	38
Petersburg district	242	40
Poland	210	23

As can be seen, Polish industry takes third place in the Empire, in absolute as well as in relative terms, while Moscow in absolute terms and Petersburg in relative terms claims first place. If we single out the two most important branches of production, textiles and mining, we obtain the following comparison: Of the total production of the Empire (without Finland), which amounted to 82.0 million poods of raw iron, 25.7 million of iron, 34.5 million of steel, and 550 million of coal, the share falling to:

		Raw Iron	Iron		Steel		Coal
Ural district		36%	56%		7.7%		2.9%
Donets district		40%	6%		42.0%		54.0%
Poland		14%	14%		23.0%		40.0%

Specifically, in metal and coal production the Donets (South Russian) basin and the Urals are the most important Russian districts, and Poland is in competition with primarily the former but in part also with the latter for the Russian market. As we see, Poland stands in second place in the Empire in mining, right behind the Donets district, excluding the production of raw iron, where it takes third place. Although Poland has only 7.3 per cent of the Empire’s total population, it has a quarter of the Russian Empire’s steel production and two-fifths of its coal production. Similarly, in the Empire’s textile industry Poland plays a very significant role quite out of proportion with the size of its population. The share of the total number of spindles and looms in the Empire’s cotton industry, which in 1886 amounted to 3,913,000 and 84,500 respectively, fell to:

	Spindles	Looms
Moscow district	55%	71.6%
Petersburg district	29%	12.8%
Poland	13%	12.5%

Here, too, Poland stands in third place. In the other branches it has a much greater significance, as is seen from the following: Of the total textile industry in the Empire, whose value of production amounted to 580.9 million rubles in 1892, 19.5 per cent fell to Poland; its share in individual branches, however, amounted in cotton spinning to 15.6 per cent, in cotton weaving to 16 per cent, in linen making to 42 per cent, in wool weaving and cloth making to 29.6 per cent, in wool spinning to 77 per cent, and in knitting to 78 per cent.

If Poland is on the whole outstripped by the industries of the central and Petersburg areas, nevertheless it leads all the other parts of the Empire in certain important branches of the economy. In particular, Poland’s great significance in these branches points to a far-reaching division of labor between Polish and Russian industry.

1.5 Poland’s Industrial Market

It has become clear from the foregoing that the Russian market forms the real mainspring of the current industrial development of Poland. It would therefore be interesting to hear more precise statements about the extent of the market for Polish commodities in Russia, but this can be determined only with difficulty. As in the statistics of all nations, there exists in those of Russia a great lack of data on internal trade. Here an overview can be obtained only indirectly and approximately. The official inquiry that took place in 1886 showed that of the 141 largest factories, which together represent a third of all production,

37 factories with 7,061,984 rubles produce exclusively for Poland, 27 factories with 7,480,645 rubles produce exclusively for Russia, 11 factories with 13,224,589 rubles produce chiefly for Poland, 34 factories with 22,824,013 rubles produce chiefly for Russia, 32 factories with 19,311,695 rubles produce half for Poland and half for Russia.

If we assume the expression “chiefly” to be equivalent to two-thirds, then Polish industry’s market can be represented as follows: The 141 factories produce commodities

for Poland to the value of 33,142,228 rubles, equaling 47%; for Russia to the value of 36,760,698 rubles, equaling 52%.

The general conclusion reached by the commission of inquiry was that Polish factories sell 50 to 55 per cent of their products in Russia. This conclusion also confirms particular statements on the market for the city of Lodz’s textile industry. These were (in poods):

		1884 (crisis)			1885			1886
		Poland	Russia		Poland	Russia		Poland	Russia
Cotton wool and cloth		372,390	1,004,286		321,344	1,115,460		443,565	1,507,259
Yarn		45,290	4,524		63,051	99,951		56,583	90,136
Total		417,680	1,008,810		384,395	1,215,411		500,148	1,597,395

Thus the center of the textile industry was already selling three-fourths of its products in Russia by the middle of the 1880s. In the ten years since the above calculations were made, however, it is probable that this situation has shifted in much greater measure in favor of sales in Russia, since production has grown by roughly half again since then, while the domestic market has obviously been able to increase only relatively little. On the other hand, we have direct evidence that the Polish market opened up new areas in Russia during these ten years, about which we will have more to say later. Thus one can assume as the minimum situation today that two-thirds of the products of Polish industry are absorbed by Russia. Specifically, this market encompasses those branches of industry that form the main stem of large-scale capitalist production in any country: the textile, metal, and coal industries. Naturally a whole series of smaller industrial branches, such as sugar and fancy-goods production, tanning, etc., are also sending their products to Russia in ever growing amounts. The advance of the Polish market in Russia offers an interesting picture from a geographical standpoint. As was said, this trade began in larger scale only in the 1870s. For a long time, however, it was restricted to only the western and southern gubernias of the Empire – to Lithuania and the Ukraine, thus actually to the old parts of what was then Poland. But in the beginning of the 1880s, Poland conquered a new market in Russia’s south, in so-called New Russia. In the middle of the 1880s, Polish trade makes another step forward. In 1883 the free transit to the Transcaucasus via Batum, agreed to in the Berlin Congress, was abolished and a tariff border erected. With this the Western European countries, above all England, lost a significant market for their products, a market that now went over to Russian and Polish industrialists. In the year 1885 Polish manufactured goods appeared for the first time in the Caucasus; since that time their import of these goods to the three centers of Caucasian trade has grown as follows:

In poods			Batum		Tiflis		Baku
	1885-86		39,000		55,000		68,000
	1887-88		95,100		200,000		258,000

At the end of the 1880s Polish trade pushed to the northeast – to the Volga region. Polish imports to the center of Volga trade, Tsaritsyn, were:

1887		55,640 poods;
1888		73,729 poods;
1889		106,403 poods.

At the same time Poland began to take part in European-Asiatic trade; its products appeared in the two colossal annual fairs in Nizhni-Novgorod, where large Polish warehouses were built beginning in 1889, and in Irbit. Finally, at the end of the 1880s and the beginning of the 1890s, Polish trade steps onto Asian ground. First, trade relations were entered into with Siberia: in 1888 with Tomsk in West Siberia, in 1892 with Nerchinsk in southeastern Siberia, in 1894 Polish commodities appear in Omsk. During the same time Polish trade in Asia also developed in two other directions, on the one hand to China, on the other to Persia and Asia Minor.

In the course of 20 years, 1870-1890, Polish trade found access step-by-step to every corner of European Russia. This rapid expansion of the market, as we have seen, turned Polish factory production into large-scale industry in 20 years. Since then, however, it has been preparing itself for a new, important undertaking: the conquest of Asian markets. Polish trade has already made several important steps in this direction. This, however, is doubtless only the beginning of a beginning, and the tremendous prospects that are opening to industry thanks to the Trans-Siberian Railway and the powerful effect of Russian policy in Asia mean a new revolution for Polish industry (among other things),a revolution perhaps even more thoroughgoing than that which it experienced in the 1870s. Polish entrepreneurs are preparing themselves in all seriousness for this future and turn their attention persistently to Asia. A museum of the East has been built in Warsaw, which has the special task of making manufacturers thoroughly familiar with the commodities, the tastes, and the requirements of Asia. The prospectus of the new institution reports:

“Sugar and brandy, machines and pipe, glass, faience, and porcelain, shoes, cravats, and gloves, shawls, cotton and linen, which are made here did not go further than to a neighboring gubernia not long ago; today they travel over the Don, the Urals, to the Caucasus, over the Caspian Sea, to China, Persia, and Asia Minor. But in order to extend this as far as possible, our taste cannot be imposed on those for whom the goods are intended; rather they must be adapted to, we must produce what will sell in those markets, where, however, taste is endlessly different from our own ... The type of cloth, the form, the pattern, the favorite colors are different there than here... That which we have produced until now was pre-eminently intended for the civilized emigrant population layers of those countries. The masses stand outside the scope of our industry. However, we want to produce goods that correspond to the taste and the customs of the masses, and therefore we must become acquainted with the needs of these masses.”

This in brief outline is the history of industry in Russian Poland. Beginning with the efforts of the Kingdom of Poland, it attempts from the first moment to take possession of the Russian market. Then, with access to those markets impeded, industry develops slowly and stepbystep. The social crisis that Russia experienced in the 1860s also tears Poland out of its economic stasis and drags it into the whirlpool of capitalist development. With the renewed and this time permanent opening up of the Russian market, Polish industry gains very fertile ground and quickly goes through the process of transformation into large-scale industry. Russia’s tariff policy monopolizes the favors of this enormous market area for Russian and Polish capitalists and engenders feverish capital accumulation. Factory industry becomes the leading factor of Poland’s entire social life, in which a total revolution has also occurred in the last 25 years.

As we have mentioned above, until the 1860s Poland preserved the character of an agricultural country dominated by the landowner class in all areas of public life. The Peasant Reform diminished to a great extent this predominance of noble landed property. The necessity of laying out the money capital now indispensable for operations heavily increased its indebtedness. The supervening general crisis in European agriculture in the 1880s and the fall in the price of grain finished it off.

The whole broad layer of medium-sized noble landed property thus moved, and moves, closer to its own ruin every day. Fifteen per cent of aristocratic property has already passed out of the hands of its owners and into German and Jewish hands; another 15 per cent has been broken up into parcels and sold to peasants. The remaining landed property is burdened with .mortgages amounting to 80 per cent of the value on the average, but in two-fifths of the cases to 100 up to 250 per cent. But at the same time industry grew stronger and stronger, and soon it was to overtake agriculture in all respects. Already in 1880 the value of industrial production was equal to that of grain production. Today it has surpassed grain production by more than double; the former amounts to at least 23 rubles per capita, the latter only 11 rubles. Furthermore, this quantitatively inferior agriculture is wholly reduced to dependence on industry. While Poland was then “a European granary,” a country producing grain principally for the world market, it now hardly satisfies its own needs. Industry created an internal market that devours the entire farm product. If today Poland still exports considerable quantities of wheat, this happens only because she imports still greater quantities of lesser kinds of grain from Russia as substitute. Secondly, agriculture today, in view of the constantly falling price of grain is forced to emancipate itself altogether from pure wheat production and to devote itself more and more to the cultivation of so-called technical crops for industry as well as cattle-breeding. It is unnecessary to emphasize that handicraft, too, where it has not been destroyed directly by the competition of factories, on the contrary lives on factory industry – in part working for it directly, in part profiting from the accumulation of capital and growth in the domestic market that industry brought about. Industry has now become the stem from which all other branches of the country’s material existence draw their life’s blood. Or better put, it is the mainspring around which all aspects of material existence revolve and subordinate themselves: agriculture, handicraft. trade, and transportation. Poland, once the country so very unique in its social relations, has become a typical capitalist country. The mechanical loom and the steam engine have robbed her of her original physiognomy and imprinted on her a leveling international character. Already in 1884 Poland suffered the specifically capitalist disease,its first big crisis. Today, here and there in the awakening labor movement, Polish capitalism’s Hypocratic characteristics are emerging as well.

Part 2: Russia's Economic Policy in Poland

The picture given thus far of the development and present state of industry in Poland is completely different from that offered by the history of the urban trades in the Poland of the Middle Ages. Despite the identical nature of their origins – artificial, governmental transplanting from Germany – manufacture in Poland not only did not perish, as had urban handicraft earlier, but developed itself into heavy industry. And despite its foreign German beginnings, it not only drove deep roots into Poland’s national life, but actually became the ruling, tone-setting factor.

Only recently certain phenomena have appeared that have awakened fears on many sides about the continued future of Polish industry. It is clear that the market in Russia, and in connection with that the market opened up since then in Asia, forms the mainspring of Polish industry. In all these areas, however, Polish products are of course in competition with Russian goods. A natural conflict of interest between the Russian and Polish bourgeoisies over these markets appears at first glance to result, a conflict that must become harsher the more Polish industry grows. On the other hand, it seems to be just as natural for the Russian capitalist class to have the Russian government on its side against the Polish competition, that the government could use its power to the disadvantage of Polish industry, and perhaps erect a tariff barrier between Poland and Russia once more as the simplest and most ruthless means of effecting this. Such ideas have made themselves very much heard recently, and here and there the opinion is expressed that after the prevailing period of prosperity a period of persecution and punishment from the side of the Russian government has begun for Polish industry, which will sooner or later go under.

Therefore, before we conclude the description of Polish industry, we must go into the question of what significance the conflict of interest between Polish and Russian factory production in fact has, what the preparations of Polish industry are in its competitive battle with Russian industry, and what the position of the Russian government toward this struggle is. In this way, we will be in a position to complete the history of industry in Poland through a perspective on its future.

2.1 The History of the Struggle Between Lodz and Moscow

Above all, it is totally untrue that the competition and the struggle between the central and the Polish industrial districts, the struggle about which so much fuss was made a few years ago, is a new phenomenon dating only from the 1880s, as is generally assumed. Quite the contrary: this battle is as old as Polish industry itself. Already in the 1820s the government was presented with petitions that from the Russian side concerned the increase of the Russian-Polish tariffs, from the Polish side the total abolition of the tariff barrier between Poland and Russia. Since then the rivalry has never really ceased. Excluding the year 1826, there were 1,831 petitions from Russian entrepreneurs sent to St. Petersburg – always with complaints about Polish industry and with demands for support for the “Fatherland’s” industry in its fight against the Polish. As one observes from the history of Polish industry, in the end the government not only did not fulfill the requests of the Russian entrepreneurs, but, on the contrary, abolished the tariff border between Poland and Russia in 1851 and so let the contest between the enemy industries take its own course. The battle flared up intensely and anew in the middle of the 1880s, first because Polish industry at this time – as was mentioned – took possession of a whole series of new market areas in Russia, in the south as well as the east, and second because, just at that time, the whole textile industry of the Sosnowiec district was seemingly conjured up out of the ground at the Prussian border. But on the other hand the price of goods, forced up suddenly and severely by the change in tariff policies at the end of the 1870s, had fallen somewhat toward the middle of the 1880s. The Moscow entrepreneurs, upset by this, began “to seek out the guilty party,” and found it, too: Polish competition. Here the battle was led chiefly by the Moscow cotton manufacturers, in the face of the conquest of Russian markets by Polish cotton goods.

A certain Sharapov led the first attack from the side of the Moscow entrepreneurs in a public speech which he gave in Moscow and in Ivanovo-Voznesenski in 1885 and which later appeared in print. From the start, Sharapov struck the keynotes and puffed up the whole campaign of Moscow cotton versus Lodz fustian into a historic duel between the Slavic and German races. He demonstrated that Polish industry in every way enjoyed more favorable conditions than Russian industry; for example, according to Sharapov, cheaper German credit was at Poland’s disposal – it cost 3.5 to 4 per cent, while the entrepreneurs in central Russia had to pay 7 to 8 per cent. Second, cheaper raw materials were available to Poland, which also had to bear far lower transportation costs than the Moscow districts lying far to the east. Third, Poland enjoyed more favorable railway rates, which it obtained as a result of the private agreement among the railway companies. Fourth and finally, it had significantly lower taxes to pay: in the central district amounting to 3,600 rubles per 1 million rubles of production; in Lodz, however, 1,400 rubles;, and in small Polish cities only 109 rubles.

Sharapov called the government to battle against the “German” industry of Poland and to the rescue of the Russian and Polish elements oppressed by it (!).

The next year, 1886, the Moscow entrepreneurs ordered a deputation to St. Petersburg with the “most humble and obedient” request to once again establish a tariff line between Poland and Russia.

The government, thus approached, formed a commission in the same year, 1886, consisting of Professors Yanshul, Ilyin, and Langowoi, which had the task of investigating the conditions of production of the Polish industrial districts and of checking into the claims of Moscow manufacturers and their correctness. The results of this investigation, carried out more seriously and more thoroughly than any other, was the following.

On the side of Polish industry we see cheaper fuel, smaller fixed capital, lower taxes, a better labor force, and more advantageous spatial concentrations of firms in a few spots. On the side of Russian industry, on the other hand, cheaper labor power, smaller transportation costs to the markets (Caucasus, Volga region, Asia), smaller outlays on the workforce (hospitals, schools, etc.), profits from the factory stores, finally a surplus of water to run the cotton weaving and spinning mills. In conclusion, the commission came out against the introduction of a tariff line between Poland and Russia, and likewise against a differential tariff on raw cotton directed against Poland, first because the government “would hardly deem it possible to treat Poland as a foreign country in trade and industrial relations,” and second because a higher differential tariff “would appear to the inhabitants of Poland, Russian subjects, as an injustice against them and would doubtless give rise to great dissatisfaction.” The commission considered the only just measure to be an increase in the prevailing taxes on Polish industry sufficient to equalize them with Russian taxes.

In 1887 the Moscow entrepreneurs once more presented a petition to the Finance Minister at the annual fair in Nizhni-Novgorod in which they requested an increase in the duties on cotton and the introduction of a higher differential tariff at the Polish border. Now the Lodz manufacturers also entered the fray. They answered the above-mentioned document with a counter-petition, in which they sought to prove that they suffered significantly less advantageous conditions of production than their Moscow competitors, that the cotton mills of the central district yielded up to 8.4 per cent profits while those in Poland yielded only 7.5 per cent, that transport of raw cotton from Liverpool to Moscow cost 35.77 kopeks per pood but from Liverpool to Lodz 37.10 kopeks per pood, that therefore a further worsening of their situation by the introduction of a differential tariff on cotton would make cotton production extremely difficult for them.

In 1888 a commission was once again set up under the chairmanship of Ber to investigate the dispute. Its conclusions this time were very much to Poland’s disadvantage, and the commission called for a series of measures to protect the Moscow industrial district against better-situated Polish industry. Meanwhile the Moscow industrialists again submitted a petition to the Finance Minister in 1888, in which they complained about their pressing situation and demanded measures from the government against “parasitical” Polish industry.

The Lodz industrialists published an agitational piece in 1889 under the title Moscow’s Battle with Lodz, in which they attempted to show through the mouth of “an impartial, non-partisan observer” that Lodz had to pay more for raw cotton than did Moscow, that the advantage of cheaper fuel which Lodz had over Moscow only came to the negligible amount of 0.2 kopeks per arshin of material, that the origins of Moscow’s more expensive credit lay with Moscow itself, and that it is was because of insufficient organization that Lodz suffered from a shortage of water, paid more for labor, and, finally, made smaller profits than central Russian industry.

In 1890 the organization and nationalization of the railway tariff system undertaken by the government gave rise once more to the convocation of a new commission. This commission was to investigate, for the xth time, what the state of the competitive conditions of the Polish and central Russian industrial districts was, and how, relative to this, the railway fares for the lines of importance to the competitors should be figured. This commission, which functioned under the chairmanship of the representative of the railway department, Lazarev, again came to no conclusion. The representatives of the Lodz and Moscow industrialists gave their well-known arguments and counter-arguments as best they could. Two arguments from the Polish side were the only new additions, namely, their reference to the use of cheap naphtha residue as fuel in the Moscow industrial district, and the claim that the tax burden was greater in Poland than in central Russia, specifically 5.82 rubles per member of the population in the latter, but in the former 6.64 rubles.

However the next year, 1891, a well-known economist, Belov, was authorized to investigate the conditions of production in Poland and central Russia. This too came to the conclusion that all the disadvantages were on the Lodz side, while all the advantages were on Moscow’s: specifically, cheaper labor power, longer labor time (Moscow 3,429 hours a year, Poland 3,212), cheaper fuel (naphtha residue costs 6d per cwt, whereas coal for the same amount of heat is significantly more, 10.25 per cwt), cheaper raw cotton, and, finally, more favorable railway fares. The same Shaparov who had sounded the first alarm against Lodz in 1885 now claimed as a result of the Belov investigation that the situation had completely changed since 1885 and that Lodz now absolutely did not deserve to be punished in any way.

It was necessary to treat the various stages of the dispute between Lodz and Moscow so thoroughly in order to show how difficult it is to form an unbiased opinion on this question, and how carefully claims about this point usually must be taken. For there is not a single argument which was not brought up by both parties, with directly contradictory figures as proof, and it is only too easy to unconsciously become a mouthpiece for one of these two industrialists’ choirs.

Now that we have become acquainted in brief with the story of the Moscow-Lodz dispute and the main points around which it centers, we ourselves will compare the competitive conditions of the two industries with each other in all the main points, in order to achieve an objective grasp of the problem on the basis of quantitative evidence.

2.2 Conditions of Industrial Production in Poland and in Russia

1. Fuel. One of the by far most important conditions of production for any factory industry is fuel. For Polish industry this factor is seen by many researchers as the decisive one in its development, and is regarded as the most important in its competitive struggle with Russian industry. So says the report of the above-mentioned commission of 1886: “Fuel is doubtless that factor of production which makes up the most important difference in the conditions of production of the central gubernias and the Kingdom of Poland.”

Polish industry possesses large and rich collieries, while the center of Russian industry, the Moscow district, lies far away from the collieries of the Donets area and is in the main forced to rely on more expensive wood or peat. “The price of wood in the Moscow gubernia is higher every day, and according to the calculation of Engineer Belikov, costs on the average 11.6 to 13.1 kopeks per pood of wood. Peat, whose use in the factories is growing rapidly and which is already being used in Moscow to the extent of 100,000 cords annually, comes to 12 and even 16 kopeks per pood, mainly due to high transport costs, and its use is in any case only to a factory’s advantage if it is in the close vicinity of the peatbog.”

In Moscow, Russian coal costs 13.3 kopeks (from Tula), 17.5 (from Riazan), and 25 (from the Donets area). English coal also costs 25 kopeks per pood. “How much more relatively expensive the most-used fuels, wood and peat, are – given at the same time the impossibility of replacing them by still more expensive coal – and how vital this question is for Russian industry, can be judged by the following: Average heat production, according to the account of the same Engineer Belikov, is 2,430 degrees (F.C.) to 2,700 degrees for wood, for Moscow peat 1,920 to 2,800 degrees; the same heat production for coal is 3,280 degrees for that from Tula, but for coal from Donets and for English coal it goes far above 5,000 degrees.”

In this connection, Polish industry finds itself in a quite different situation. The average price of coal in the main centers of industry – Sosnowiec, Lodz, and Warsaw – are: 2.4-4.95 kopeks, 11.5 kopeks, and 13 kopeks per pood, thus less than wood in Moscow, while heat production is of course significantly greater.

Calculated per unit of product, outlays for fuel amount to:

per pood of cotton yarn
	in Poland		in Moscow	in St. Petersburg
	38 kopeks		90 kopeks	53 kopeks

These figures suffice to show the great advantage that Polish industry has in regard to fuel over its Russian competition.

Professor Schulze-Gävernitz nevertheless believes it possible to say that “natural advantages are of no benefit to Polish industry. Certainly cheaper fuel is pointed to, but according to Mendeleyev’s data, compared with the above-mentioned report, this advantage declines to the extent that Moscow goes over to naphtha fuel (one pood of bituminous coal in Lodz, 12-13 kopeks, the same heat value in naphtha, 12.75 kopeks).”

On that, the following should be noted. First, a pood of bituminous coal does not cost 12-13 kopeks in Lodz, as Professor Schulze-Gavernitz says, but 8.75–13.5 (or 8.3–14.7), and a pood of naphtha coal, i.e., a quantity of naphtha corresponding calorifically to a pood of coal, costs not 12.75 kopeks but 13–20 kopeks, thus significantly more than coal in Poland. Second, for the present naphtha makes up only 20.5 per cent of all fuel in the Moscow district – in particular, 29.4 per cent in the cotton industry in the Moscow and Vladimir gubernias – and so cannot influence the conditions of production among the overwhelming majority of the factories in these districts.

But third, as far as the future of this fuel method, Professor Mendeleyev says in his essay dedicated to the naphtha industry: The use of this (naphtha residue) as a fuel today, where there is no possibility of utilizing the bulk of the naphtha obtained (as a result of the lack of a pipeline to carry naphtha from Baku to Batum), is the most natural phenomenon, although a unique and temporary one.” “For normal fuel needs, particularly for fueling steam engines where any sort of fuel is suitable, the use of a fuel as costly as naphtha residue can find wide circulation only temporarily, in those transitional moments of industrial activity in the nation where industry has not had the time to arrange a proper bed for itself; but today in all countries that presumes as its condition – the use of coal.”

And still further. “The use today of 130 million poods of naphtha residue in Russia must be regarded as a temporary phenomenon, which depends, on the one side, on the lack of a market for naphtha on the world market, and, on the other, on the lack of productivity in the extraction of coal and of its distribution throughout Russia, particularly in the center and the southeast.” “The construction of railway lines from the Donets coal district to the Volga, and various measures directed toward utilization of naphtha supplies in Baku and toward cheap export of coal from Donets, form the current tasks of Russia’s industrial development, and must make an end to today’s irrational, widespread use of naphtha residue from Baku for steam boilers.”

The above quotations, which express the opinion of the best judges on this question, suffice in our opinion to demonstrate that in the comparative valuation of fuels in Poland and in Moscow, naphtha fuel in the latter must be disregarded, as a temporary phenomenon. What is now called “naphtha residue” is not some actual production by-product, but the product of the naphtha extraction itself, which is very insufficiently utilized only as a result of the lack of a market, and to a great extent used for fuel rather than lighting: thus among exports from Baku, for every pood of naphtha in, for example, the year 1891 there corresponds 1.40 poods of naphtha residue, and in 1894 as much as 2.73 poods. Thus the so-called residue actually forms the main product, and naphtha on the other hand the by-product.

The abnormality of this phenomenon appears in the quality of the product itself. The “residue” so obtained explodes at 50 degrees, 40 degrees, and even 30 degrees Centigrade, while the normal explosion temperature for actual naphtha residue cannot be lower than 140–120 degrees. Thus also the costly results of cheap fuel: in the course of the years 1893 and 1894, 20 vessels of the Astrakhan Steamship Company that were fueled with “residue” were destroyed by outbreaks of fire. Another disadvantage of naphtha fuel is the fact that this residue, because of its chemical composition, is in fact used in much greater quantities to produce a specific effective heat than should be the case with real naphtha residue. The larger consumption of “residue” sometimes amounts to 40 per cent, and was confirmed by the administration of the Petersburg-Moscow railway line as an established phenomenon.

This makes the most important advantage of naphtha fuel – its cheapness – for the most part completely illusory. Here and there some are already beginning to renounce the use of naphtha residue, as with the Russian South-East railway, which recently returned to coal. Certainly the consumption of naphtha residue in the central industrial district will in the next few years increase before it will decrease, particularly as a result of overproduction and lower prices. With the Russian government’s current vigor in promoting capitalism and pushing aside all obstacles in its way, however, the use of naphtha will soon be reduced to its rational purpose, and factories will be reduced to using wood and coal. In the end, however, Poland’s advantage remains in full force, for “in general fuel is half as expensive in Poland as in Moscow.”

2. Labor power. This aspect of industrial activity is usually cited as proof that Poland has less favorable conditions than does Russia because its labor is more expensive than the latter’s. Wages are in fact significantly higher in Poland than in Russia, specifically:

	Cotton Spinning	Cotton Weaving	Finishing	Wool Spinning
for men	18.75%	36%	19%	59%
for women	42%	37%	107%	91%
for children	14%	79%	85%	27%

	Wool Weaving	Cloth Making	Half-wool Weaving	Average
for men	31%	13%	60%	32.2%
for women	105%	33%	122%	73.9%
for children	112%	40%	150%	60.0%

Labor time, on the other hand, is significantly longer in Russia than in Poland. “While 13- to 14-hour-long labor is very widespread in Moscow factories, in Poland it is to be found only in nine factories, and in three of these cases only in separate factory sections. While labor time lasting more than 14 hours is absolutely not a rarity in Moscow factories and its outer limit is 16 hours, 14-hour labor time must be described as the outer limit in Poland, and in fact this was found only in two cloth factories.” In general, 10 to 12 hours were worked in 75 per cent of the factories; thus 11 hours can be taken as the average labor time for Poland. In Moscow, the average labor time is more than 12 hours. In Poland, night labor is a rare exception; in Moscow it is wide-spread. And despite the fact that in Poland the number of work-days in the year is 292, while in Moscow it amounts to 286; for Poland there are nevertheless only 3,212 labor-hours per year, while the number in Moscow (figured on the basis of only 12 hours a day) is 3,430 hours, thus 218 hours more.

These two factors, lower wages and long labor time, are usually regarded as important advantages for Moscow industry in its competitive struggle with Polish manufacturing. Yet we believe that this opinion can be shown to be premature and superficial.

First, in comparing wages, usually the wages of male workers in Russia are juxtaposed to those of male workers in Poland, while likewise the wages of female workers in Russia are compared to those of female workers in Poland. This is how the 1886 commission for the investigation of Polish industry, among others, proceeded. This is wrong, as factory inspector Sviatlovski perceived, insofar as, in Poland, female and child labor is far more extensive than in Russia, so that frequently a female worker in Poland stands counterposed to a male worker in Russia; therefore, the wages of male Russian workers must frequently be compared with not those of male but of female Polish workers. In fact, the number of women employed in the Polish textile industry (the industry of most importance to the question of competition) amounts to more than 50 per cent of all factory personnel, while in the Moscow district female labor amounts to only 37 per cent in the cotton industry and only 28 per cent in the wool industry.

If the wages of male workers in Russia are compared with those of female workers in Poland, the picture shifts in many ways to the disadvantage of the Moscow district, or in any case there is an equalization of conditions. The average monthly wages in the textile industry are (in rubles):

		in Poland		in Russia
for men		20.1		15.2
for women		15.3		8.8
for children		8.8		5.5

To obtain true and exact data on relative wage levels in Russia and Poland, it is necessary to consider the composition of the labor force in terms of age and sex in both countries as well as nominal wages. The result thus attained will be in many ways significantly different than the foregoing. This above all is the corrective that should be applied to the usual conclusions drawn from the comparison of wages.

Second, the fact that the Russian worker frequently receives lodging (and here and there even board) from the factory is often disregarded. This applies not only to single but also to married workers, whose families usually live in the same factory barracks. Here heating fuel is likewise provided by the factory. This should be figured into the wages of Russian workers if one wants to make an exact comparison. Thus the difference even in nominal wages is not so greatly to Poland’s disadvantage as would appear from a more superficial comparison.

But far more important are further factors which show that factory labor in Poland is significantly more intensive than in Russia.

The Polish worker is first of all more intelligent and better educated, on the average. Insofar as Professor Yanshul investigated this question, it was shown that in the central district the number of workers who could read and write amounted to 22 to 36 per cent of the total, in Poland to 45 to 65 per cent.

Furthermore, the Polish worker is better fed than the Russian worker, and this is especially true for women. Third, the workforce in Poland is a stable layer of the population, devoted exclusively to factory labor. In Russia, an observable, although gradually decreasing, portion of the workforce is still made up of peasants who return to the land in the summer and exchange precise factory work for crude farm labor.

Fourth, the Polish worker is far more individualized in his way of life than the Russian. As was already mentioned, the latter in many cases lives in factory barracks and is allotted board by the factory. Such a way of life, under certain circumstances, leads to the stunting of individuality. The Russian worker thus remains constantly under the control of his master and is bound by the factory rules even in his private life. The Moscow factory inspector knew of factories where, he reported, singing – whether in workplace or living quarters – is is punished by a fine of five rubles; likewise workers incur a high fine when they pay each other a visit, and so forth. Not infrequently, workers are assigned to an apartment in a damp factory cellar, or in rooms that are so mean that one almost has to go on all fours to get into them. In Poland the situation is different: the worker always runs his own household, and his housing is significantly better overall.

According to the unanimous opinion of all researchers who have made wage labor the subject of their investigation, all the cited factors – education, better housing and food, individual households, in short, everything that raises the living standard of the worker – are of decisive significance for the intensity of his activity.

Finally, piece-rate wages predominate in Poland, which, it is recognized, raises the intensity of labor to the utmost, while in Russia the time wage predominates.

All the above-mentioned factors make it apparent that the labor of Polish factory workers is far more intensive in comparison to that of Russian workers. And this characteristic of the Polish worker so greatly outweighs his higher nominal wages and shorter work time that he turns out to be cheaper to the Polish factory owner than the Russian worker is to his employer.

Reckoned per pood, wages amount to (in rubles):

		for cotton fabrics		for cotton yarn
in Poland		0.77–1.50		0.66–1.20
in Russia		2 and more		0.80–1.50

The difference in the length of the workday in Poland and Russia belongs to the past now that the workday has recently been reduced by law to 11.5 hours. However, the new measure will primarily be to the advantage of the Polish industrialists in their competitive struggle, perhaps for years to come, even if it will, in time, doubtless become a spur to technical development for the Moscow district. For the Russian worker’s productivity, whose lower level depends on so many other factors, will obviously not increase overnight. Just how justified this conclusion is is shown by the fact that already in 1892 the Polish factory owners – in part to show a friendly face to the workers, who in May of that year had mounted an impressive strike in Lodz – went to the government with the request that the workday be reduced to 11 hours throughout the Empire, a project which foundered primarily because of the resistance of the Moscow industrialists.

3. Composition of capital. This important factor is also differently shaped in Poland than in Moscow. In Poland, a firm’s sum of fixed capital is in most cases exceeded by the value of its yearly production, sometimes even two or three times, but on the average the relationship of fixed capital to the value of production is 2:3.2. In Russia, particularly in the central district, this relationship is inverted. Here the value of production (in the same branches of production) is often smaller than fixed capital, at most the same, and only seldom significantly higher. This phenomenon stems from two circumstances. First, far more is spent on buildings for enterprises in Russia than in Poland, because construction materials are very significantly more expensive. Second, however, because the great majority of factories in Russia include their own factory barracks, which never occurs in Poland.

If, therefore, what Marx calls the “organic composition of capital” (the relationship of the constant to the variable portion of capital) is “higher” in Russia than in Poland, this has absolutely nothing to do with the higher stage of development of Russian production, but on the contrary with its primitive plant, for the most part. This makes necessary a series of expenditures that have nothing to do with the actual production process. As a result – all other conditions of production and sale being equal – the Polish industrialists are able to realize a surplus profit from the sale of their goods on the Russian market, in comparison with the Russian entrepreneurs. In addition, Polish labor, as was shown, is far more intensive.

4. The turnover period of capital is much shorter in Poland than in Russia. First, reserves of fuel and raw materials are stocked for long periods. The high prices and the general shortage of fuel in inner Russia mean, for the Russian entrepreneur, the necessity of laying out large sums of money for the purchase of forests or peat bogs. In this way almost every large Moscow factory has put more or less considerable dead capital into forests and bogs. In addition, wood and especially peat are cheaply and easily delivered only in winter; therefore every Moscow factory lays in reserves of these fuels for a full year, even for two years. In Poland, because of the short distances involved, stocks of coal are laid in for only one to four weeks, at most for three months. Similarly, in Russia stocks of raw materials, particularly cotton, are laid in for lengthy periods, in Poland only for two to six months.

Second, the Polish industrialist realizes his product much more quickly than does the Russian entrepreneur. The Poles grant their customers only three to six months’ credit, the Russians 12 to 18 months. The Poles – following the English and German model – produce produce on orders obtained by their traveling agents; the Russians produce according to their own estimates, often stocking for two or three years. This factor also signifies that Polish industrial capital – all other things being equal – is better armed for competitive struggle.

5. The concentration of production is significantly greater in Poland than in Russia. The value of production per factory in those branches of industry not levied with excise duties averaged in rubles:

		1885		1886		1887		1888		1889		1890
in Russia		50,824		52,248		54,601		58,237		58,972		57,578
in Poland		57,875		63,860		71,894		74,051		71,305		71,248

The difference is still greater if particular branches of production are compared. In the coal industry, for example, the situation is as follows. If the number of pits and shafts as well as the quantity of production in Russia are taken to be 100, then one finds in Poland in 1890 6.8 per cent pits, 6.2 per cent shafts, 70.6 per cent production.

With a number of shafts 16 times smaller, therefore, coal extraction in Poland equals more than eleven-sixteenths of Russian coal extraction. Eighty-five per cent of the quantity of the entire yearly production of the Dabrova district (1893) is yielded by five firms.

In other branches, such as the cotton industry, the gross product per factory is greater in Russia. The smaller concentration of this sort of production in Poland has to do with special circumstances, however, which to go into here would lead us into too much detail and which in any case have nothing to do with the degree of technological development, On the contrary, in Poland, as we will soon see, the yearly value of production per worker is in this as in most branches greater than in Russia.

6. The technology of production, lastly, forms the most important difference between Polish and Russian industry. We will compare the most significant branches of production in both countries in terms of technology.

To begin with the textile branch, first the cotton industry shows:

1890		Factories	Spindles		Looms	Steam Horsepower
Russia		351	2,819,326		91,545	38,750
Poland		94	472,809		11,084	13,714

1890		Production (in thousands of rubles)		Workers
				Male		Female
Russia		208,581		103,916		83,941
Poland		31,495		10,474		9,535

The technical superiority of the Polish cotton industry is clear from the above comparison. In comparison with the Russian industry, it has: 10 per cent of the workers, 15 per cent of the production. 35 per cent of the steam power.

For every worker there is 1,110 rubles production yearly in Russia and 1,574 rubles in Poland, that is, 42 per cent more. Steam power amounts to 204 for every 1,000 workers in Russia, to 186 for every 1 million rubles of production; it amounts to 685 for every 1,000 workers in Poland, to 439 for every 1 million rubles of production, thus 236 per cent and 136 per cent more, respectively, in Poland.

Finally. the use of female labor is greater in Poland than in Russia. In the latter, female workers make up 44.7 per cent of the personnel, in the former 47.6 per cent. According to other accounts which we noted above and which inspire more confidence because they were determined not by summary bureaucratic statistics but by a special commission, the use of female labor in Poland is much higher, and in Russia, on the contrary, much lower.

Roughly the same result is obtained by comparing the wool industry in Poland and in Russia, This shows:

1890		Factories		Spindles		Looms	Steam Horsepower
Russia		164		77,474		11,784	2,230
Poland		168		245,892		4,016	6,667

1890		Production (in thousands of rubles)		Workers
				Male		Female
Russia		21,585		14,471		7,050
Poland		26,199		8,486		6,670

For Poland, in comparison with Russia, this comes out to: Workers 70.4 per cent, production 121 per cent, steam power 299 per cent; thus for every worker in Russia 1,003 rubles production annually, for every worker in Poland 1,729 rubles, that is, 72 per cent more. Steam power amounts to 104 for every 1,000 workers in Russia, to 103 for every 1 million rubles of production; it amounts to 440 for every 1,000 workers in Poland, to 254 for every 1 million rubles of production.

Thus if we take 100 as the number for the steampower per 1,000 workers or 1 million rubles of production in Russia, then we find the same in Poland to be 323 per cent and 146 per cent more, respectively. In the use of female labor, we see here an even greater difference between Poland and Russia than in the cotton industry, specifically 32.7 per cent female workforce in Russia, 44 per cent in Poland. The technical superiority of the Polish textile industry is even more evident in the fact that higher grades of spinning yarn and finer sorts of cloth are manufactured in Poland in many branches than in Russia.

Let us turn to the second most important branch of capitalist production, the coal industry. We have already made mention of the strong concentration of this branch in Poland. Of the product extracted annually comes:

		Coal in poods
		from 1 pit		from 1 shaft
in the South Russian district		678,000		240,000
In Poland		7,500,000		2,985,000
		(+1,006%)		(+ 1,144%)

(Here and below we compare the Polish coalfields with the South Russian fields in particular, because that is Russia’s biggest reservoir and the most important for the future.) A corresponding relationship is discovered when the quantity of production, the number of workers employed, and the steam power used are compared:

1890	Steampower	Workers	Production (in millions of poods)
Russia	6,701	30,077	213.4
South Russian district	5,856	25,167	183.2
Poland	10,497	8,692	150.8

Thus, while in Poland (1890) one worker raises 17,348 poods of coal a year, in Russia this comes to only 7,096 poods per worker and in the South Russian district in particular, 7,281 poods, approximately two and half times less than in Poland.

	for every 1,000 workers	for every shaft
Steam power amounts to:
Russia	223	8
South Russian district	233 (100%)	–
Poland	1,208 (+419%)	202

From 1890 to 1894, the amount of steam-power in Polish mining rose by more than 50 per cent: from 10,497 to 15,934.

Of the other important branches of industry we want to single out the sugar industry.

Sugar-beet growing itself is carried on in a significantly more rational way in Poland than in the two Russian sugar production districts. For example, the average beet harvest per desyatin in the years 1882-1890 was:

Central Russia		73.2–125.3 berkovez
Southwestern Russia		80.1–114.4 berkovez
Poland		88.0–127.6 berkovez

In the year 1895:

Central Russia		51.1–117.4berkovez
Southwestern Russia		90.0–121.2 berkovez
Poland		94.3–144.5 berkovez

Likewise, the quality of the Polish beet is much higher than the Russian. The sugar content of the juice and its purity are:

1890-91		Sugar content
		in juice		Purity
Southwestern district		13.49%		80.85%
Central district		13.63%		78.94%
Poland		14.81%		85.20%

The same superiority of Polish technology is shown by the higher yield of white sugar from the beet juice and the lower yield of molasses In 1881-82–1890-91 this was on average:

		White sugar		Molasses
Central district		7.0– 9.47%		3.29–4.24%
Southwestern district		7.7–10.48%		3.60–4.31%
Poland		8.2–11.39%		1.53–2.28%

Finally, the utilization of processing by-products is far more intensive and more widespread in the Polish sugar industry than in the Russian. In 1890-91, of 182 factories in the central and southern districts, 10 with 125 osmosis devices conducted the extraction of sugar from molasses by osmosis; of 40 factories in Poland, 24 with 206 osmosis devices.

The above comparative analysis of the most important conditions of production shows that Polish industry is considerably better equipped than Russian and especially central Russian industry. Certainly it is a well-established fact that the Moscow district for its part exhibits an important advantage in the cotton industry, namely the abundance of water, while in this respect the Lodz district suffers from a tremendous shortage, as was mentioned. On the other hand, Poland lags behind in one of the most important branches of the economy – the iron industry – relative to the natural wealth of Russia, so that it must obtain part of the ore and likewise coke for its ironworks from the South Russian region. In addition, metal production in the Donets region is also much more concentrated than in Poland. It is furthermore true that Moscow is located much closer to the important market outlets for the textile industry — the eastern part of Russia and Asia — than Poland is.

However, the advantages which we find in every branch on the Polish side – more capable labor power, cheaper fuel, higher technology in the production process and trade – could in our opinion outweigh numerous advantages of Russian industry. For all the cited factors have an invariant significance, indeed become more decisive in the competitive struggle with every passing day. How very much the significance of industry’s distance from markets has already receded into the background, compared with its technical superiority, was recently proved by the amazing spread of the German market in England, and even in the English colonies. Within one and the same customs zone, of course, the outcome of competition in the market depends to still greater degree on the stage of development of production, i.e., on just those factors which Polish industry has on its side. This is corroborated by, among other things, the fact that the Polish iron industry, for example, despite the above-mentioned dearth of natural advantages, is mounting severe competition to the South Russian iron industry itself, and that the Polish iron industry is developing parallel to the South Russian industry, at the expense of every other district in the Empire. Aside from the Polish industrial sector, industry in St. Petersburg is also shaping up into a progressive and rather highly technically developed Russian industrial region, and it is a particularly favorable circumstance for Poland that in the most important markets it is in competition with the Moscow district – the most anachronistic industrial district in Russia, which is unique in the Empire in its long workday, low wages, truck system, barracks housing of the workforce, enormous stocks of raw materials, in short, its economic backwardness.

The coexistence of such diverse levels of production, as represented by the Polish and St. Petersburg industries on the one side and Moscow industry on the other, is possible only because of two circumstances: first, the size of the Russian market, in which all competitors can still find room for themselves, and second, the hot-house atmosphere created by the customs policy, which has made this enormous market the exclusive monopoly of domestic – Russian and Polish – entrepreneurs.

2.3 The Economic Ties Between Poland and Russia

After the foregoing, it is clear that – were only free competition to be decisive in the battle between Polish and Russian industry – the future of the former would be assured, at least to the degree that the capitalist development of the Russian Empire is granted a shorter or longer term by the general fate of the world economy.

However, we have already mentioned the other important factor that is of the greatest significance for the future of Polish capitalism: we mean the economic policy of the Russian government. It is all the more necessary to throw some light on precisely this factor, since the question (as is well known) stirred up so much dust a few years ago and one even comes across the notion that since the middle of the 1880s a real “era of persecution” has dawned for Polish industry.

Actually there are grounds enough to regard all assertions of this sort a priori as baseless. The best and last touchstone for all relevant government economic measures – the growth of industry in Poland up to the present moment, and still at the same impetuous tempo – sufficiently proves (it should seem) that all the uproar about Polish industry’s approaching end was wrong. This growth is shown in the following striking table:

	1871	1885	1886	1887
*Output of total industry	44.4	134.8	137.8	164.5
(branches not levied with excise)
*Total output of textile industry	18.1	66.7	81.4	88.9
**Raw iron	1.4	2.5	2.8	3.7
**Iron	0.9	4.2	4.6	3.8
**Steel	—	2.4	3.1	3.0
**Coal	12.6	109.3	120.0	121.1
	1888	1889	1890	1891
*Output of total industry	162.3	168.3	174.2	188.3
(branches not levied with excise)
*Total output of textile industry	89.9	96.6	88.4	100.8
**Raw iron	4.8	5.4	7.4	7.5
**Iron	3.2	4.0	4.1	4.4
**Steel	3.1	2.4	3.4	3.0
**Coal	147.3	151.1	150.8	158.8
	1892	1893	1894	1895
*Output of total industry	228.3	—	—	—
(branches not levied with excise)
*Total output of textile industry	113.4	—	—	—
**Raw iron	9.0	9.9	10.7	11.3
**Iron	3.7	3.5	3.8	3.6
**Steel	4.0	5.4	6.2	7.9
**Coal	176.0	192.1	202.4	221.8
* in millions of rubles in millions of poods

As can be seen from the above table, the growth in the seven-year period 1885-92 amounted to: 69 per cent in industry as a whole, 70 per cent in the textile industry (specifically, 40 per cent in cotton spinning and weaving, 77 per cent in the wool and cloth industry, 101 per cent in all other branches); in mining over the ten-year period 1885-95: 352 per cent for raw iron, 229 per cent for steel, 103 per cent for coal; only in the production of iron do we see a decline, of 14 per cent, as in recent times a vigorous development of steel production at the expense of iron production becomes observable in Poland and the South Russian district. Still more interesting than the growth during the latest period (1885-95) is the comparison of this decade with the previous period (1871-85), which is held to be the time of Poland’s greatest economic prosperity. The increase, in absolute numbers, amounted to:

Branches not levied with excise		Textile Industry	Raw Iron		Iron	Steel	Coal
		(in millions of rubles)			(in millions of poods)
In the 14-year period 1871-1885		90.4	48.6		1.1	5.7	96.7
In the 7-year period 1885-1892		93.5	46.7		—	—	—
In the 10-year period 1885-1895		—	—		8.8	4.9	112.5

Thus, in view of the above figures, not only does speculation about the incipient decline of Polish industry rest on complete ignorance of the facts, but it is clear, on the contrary, that industry has grown more in the last seven- to ten-year period than in the preceding 14-year period. This becomes most clear when we calculate the growth in both periods by year. The average yearly growth in the later period was greater than in the preceding one, specifically: 107 per cent in industry as a whole, 90 per cent in the textile industry, 20 per cent in the production of iron and steel, of coal 63 per cent, of raw iron 1,020 per cent.

On the other hand, at the end of the first part of our work we also cited Polish industry’s latest conquests in Russian and Asian markets into the 1890s. The body of Polish capitalism thus seems to exhibit not one symptom that would justify the claim that it is pining away from some internal malady; on the contrary, the much cried-over invalid grows and blooms “as splendidly as on the first day.” But because the question was once raised and for years agitated public opinion in Poland, and also because it is interesting and important enough in itself, it seems appropriate to go into this question more fully and, through a thorough examination of the subject, to derive an explanation of what the situation is and can be with regard to the economic policy of the Russian government in general and toward Poland specifically.

It is characteristic of all the mentioned and quoted statements about the anti-Polish course that they are based exclusively on particular measures and decrees, sometimes in the sphere of customs policy, sometimes that of the railway fare system. But it is obvious that no real understanding of government policy can be reached by this road. For first of all, what is being referred to in the case at hand is a most extremely variable quantity: a tariff imposed today, a railway fare introduced to-day, will be lifted tomorrow. This is, in fact, what happened, for example with the differential tariff on raw cotton, which amounted to 15 kopeks in gold more on the Polish border than at the rest of Russia’s borders. When it was introduced in 1887, a wail of lamentation went up among the Polish cotton-factory owners, and it was said that Polish industry had received its death blow. The differential tariff also played the leading role as proof that the “era of persecution” had begun, and it was denounced at every opportunity. But then this tariff difference was once again lifted in the year 1894, on the grounds of the Russian-German trade agreement, making way for a single tariff on cotton at all Russian borders. The same was the case with the differential tariff on coal and coke at the western border, which was frequently represented as a measure aimed directly against the Polish iron industry. But in 1894 this tariff was likewise reduced by half. In the same way, railway fares were changed in part every year, indeed sometimes even more frequently. Thus the actual tariffs and fares by themselves do not provide a firm foothold from which to get an insight into Russia’s economic policy.

To attain a thorough understanding of this policy, it is necessary to disregard particular measures for the present, to look deeper into the economic relations of Poland and Russia on the one hand and their political interests on the other, and to seek to derive from this the economic policy of the latter. Only by following the guideline thus obtained will it be possible to trace the particular measures of this policy back to their real significance.

First of all, then, what is the nature of the economic ties between Poland and Russia? If one were to form an opinion under the immediate impression of the Lodz-Moscow entrepreneurs’ battle, one would be inclined to assume that the Polish and Russian bourgeoisies form two completely separate camps, whose interests run directly counter to one another at every point and who both battle against each other using all available means. Such a notion would nonetheless be utterly wrong.

What precludes such a sharp difference in interests from the outset is the thoroughgoing division of labor that exists between the industries of these two countries. As we have seen, Poland is for Russia a source of supply for wool yarn, machines, coal, etc., etc., while Russia furnishes Poland with raw wool, raw iron, coke, and cotton.

Such a relationship already presupposes that the interests of some Polish manufacturers cohere with the interests of Russian raw materials producers, and that the interests of some Russian manufacturers cohere with those of Polish producers of half-finished goods. This is confirmed by abundant data. The producers of South Russian wool, the planters of central Asian cotton, exercise pressure on the railway fare system in their own interest to keep transport of their raw product to the Polish manufacturers as cheap as possible. Russian wool-weavers likewise seek to encourage the transport of Polish yarn to Russia as much as possible, etc., etc.

Furthermore, from the fact that the battle between the manufacturers and the producers of raw materials and half-finished goods is fought out in the sphere of the common tariff policy of the two countries, it follows that the battling parties from Poland would often unite with those from Russia in order to march hand-in-hand with the national enemy against their own brothers. The history of Russian-Polish industry provides examples in quantity. In the year 1850, for example, the Russian government, under the pressure of joint petitions by Polish and Russian wool-weavers, reduced the tariff rate on wool yarn. But hardly had this happened when Polish and Russian spinners, in touching accord, besieged the government to again push up the tariff rate on yarn, which happened in 1867. Beginning in 1882 the government was solicited by the machine producers to increase the tariff on foreign machinery. “In this connection the initiative was that of the Riga manufacturers, who were followed by the others in Warsaw, Kiev, Kharkov, and Odessa with great unanimity.” However, when the government had obeyed this wish and increased the tariffs on machinery, a storm of petitions arose from the property owners, again from all over the Empire without differentiation, against the increased price of agricultural machinery.

Just these two examples give us a quite different picture of the relationship between the Polish and Russian bourgeoisies, in their collective just as in their competitive endeavors. Neither of the two national capitalist classes appears from the inside as a closed phalanx, but on the contrary is fissured, torn by conflicts of interest, split by rivalries. Yet, on the other hand, their different groups, unmindful of the national quarrel, reach out their hands to one another in order to deal their own countrymen an opportune blow to the wallet in the glorious prize-fight for profits. Thus it is not national but capitalist parties that are found opposed on the industrial chessboard, not Poles and Russians, but spinners and weavers, machine producers and landowners, and on the flags waving over the combatants one sees not the one-and two-headed eagles, but only the international emblem of capitalism. Finally, the government unexpectedly appears in the strange role of an indulgent mother, who impartially hugs all her profit-making children to her broad bosom, even though they are constantly squabbling with each other, and seeks to appease now the one, now the other, at the expense of the consumers.

The above phenomena recur countless times in the history of Polish and Russian industry, and are of such decisive importance for the question under consideration here that it is well worthwhile to give a few more typical cases as examples. It is, for example, most highly instructive to observe how the two main opponents – the entrepreneurs of the Lodz and Moscow districts, whom one would be inclined to accept as representatives of the interests of, respectively, the Polish and Russian bourgeoisies as a whole – try at every opportunity to trip up the other industrial districts of their own countries. Thus the Lodz cotton manufacturers, in their above-mentioned polemic, seek to turn the jealousy of the Moscow manufacturers away from themselves and toward the old Polish wool industry district of Bialystock. “If one can speak of a competition, then far more dangerous to Moscow is Bialystock and its district,” they assure their adversaries. Meanwhile, these same Lodz entrepreneurs most humbly and obediently denounce their blood-brothers of the Sosnowiec district to the Russian government, pointing to the fact that in the latter a full third of the workforce are German subjects, while in the Lodz district – thank God – only 8 per cent.

No less brotherly sentiment is displayed by the Moscow capitalists when they come to speak of the affairs of their comrades in the other Russian industrial districts. So we hear them bewail the result of a plan for the regulation of waterways worked out by the Ministry of Transport: “The small expenditures, just like those of many millions, are allotted exclusively for Russia’s western and southern zone. The whole central region of Russia has been almost entirely forgotten. This region, this neglected center of Russia, key Russian gubernias, is relatively poor in waterways,” and so forth in the same weepy tone. Here the jealousy of the Moscow capitalists gushes forth with impartiality and true internationalism against all other industrial districts in the Empire without distinction, against Poland and the Volga region, against the Baltic Sea provinces and the Dnieper district.

The following example shows how elastic the notion of national solidarity and the “Fatherland” can be for the Polish capitalists under certain circumstances. In the year 1887 the large Warsaw steel factory was relocated to the Yekaterinoslav Gubernia in South Russia, to be nearer to sources of supply of raw iron and coke. Two years later, its owners – Polish capitalists – together with the English, Belgians, Russians, etc., who hold the South Russian iron district under their dominion, sent a most humble and obedient petition to the government in which they complain about the advantages of the Polish iron industry and the competition from that quarter and beg for an increased railway fare rate on Polish iron for the protection of the “Fatherland’s” – i.e., this time South Russia’s – industry.

Last, a classic example of this situation was provided in recent years by the question of the railway fare rates for grain. In 1889 new, strongly differential rates were introduced for grain as part of the general regulation of the Empire’s fare system, to facilitate exports from the gubernias lying deep in inner Russia to other countries. However, the result was that masses of grain and flour from the inner city regions, particularly the Volga district, were sent to the regions lying near the border, thus bringing on a rapid fall in the price of grain in the southern provinces on the Black Sea, in the Baltic provinces, and finally in Poland. Injured in their most virtuous sentiments, the landowners in all these parts of the Empire cried bloody murder, most of all the Polish landowners who in the beginning tried to take this opportunity to again step forward in the name of all Poland, oppressed by cheap bread. Yet hardly was their national defense crowned by success and the execrated fare partially annulled in the beginning of 1894, when a group of Polish entrepreneurs and merchants entreated the Railway Department in St. Petersburg, by telegram, to maintain the earlier fare rate in order, as they put it, not to make bread more costly for the people. The picture thus shifted from moment to moment, and from a fight between two national parties the grain tariff question turned into a dispute between the landed proprietors and the industrialists in Poland. Here the latter marched together with the Russian landowners of the central gubernias, while the Polish landowners took the field jointly with the Russian landowners of all the border districts.

This motley grouping of interests was particularly evident in the deliberations on grain tariffs in St. Petersburg in October 1896. On the one side stood the representatives of the Volga district, whose case, as we have seen, was at the same time that of the Polish industrialists; on the other side, the landed proprietors of Livland, Vitebsk, Odessa, the Polish landowners, and also, what is most interesting, the landowners of the Moscow district. Here Poles and Muscovites appeared on the best of terms, and the Polish landowners and millers declared themselves in full agreement with the program of Prince Shcherbatov, the chairman of the Moscow Agricultural Society. Almost as if to underline the conflict of interests between industry and agriculture in Poland itself, on the other hand, Chairman Maximov of the Polish representatives (among others) objected: If Poland were permitted to sell its factory products in inner Russia unhindered, then it would be highly inconsistent to forbid access to Poland to agricultural products from inner Russia.

May it appear as proven after the above examples, which we do not want to pile too high, that the interests of the Polish and Russian entrepreneur groups absolutely do not contradict each other on all points – that, much more, they continually mesh together. But also, on the whole, Polish industry is tied up with several important sections of the Russian bourgeoisie by a solidarity of interests, above all with the two most important factors of economic life: the institutions of transport and credit and trade. It is obvious that the development of Polish industry and, together with this, of the Polish market in Russia is directly in the interests of the Russian credit, factoring, and railway corporations. To again pull out only two from the abundance of striking examples: the administration of the Russian railway line Rjasan-Ural turned to the Warsaw entrepreneurs in the fall of 1894 with the offer to hand over space in all its stations, free of charge, so that the Polish factory owners could have permanent displays of goods there to encourage Poland’s market in the Volga region. Thus, while the Moscow factory owners wanted to do battle with their Polish competitors over every market in Russia, the Russian railway corporations invited this same Polish competition to forge ahead with its goods as deeply as possible into inner Russia.

Another characteristic case took place recently as a result of the new tariff on cotton. So long as the above-mentioned difference in customs rates was maintained on the western border, the Lodz factory owners, in order to get around the troublesome tariff, got their cotton via Libau and Odessa, i.e., by means of Russian railroads. When the customs difference was annulled in 1894, cotton transport returned to the old land routes: Bremen-Alexandrovo and Triest-Granica, thus to German and Austrian railways. Now the latter used this opportunity to set very low freight rates for cotton and so to monopolize this transport for themselves at the expense of the Odessa-Lodz line. The loss of transport, however, hit the Russian railways hard, and so the St. Petersburg railway department has recently turned to the Lodz factory owners with the question of how much to decrease the freight rates on the Russian lines so that cotton transport would once more go via Odessa. The Lodz factory owners dictated a rate decrease of 30 per cent. Likewise the Russian banks, in their own interest, are promoting Polish sales in Russia whenever possible. Once again national borders clash with capitalist interests, and what the national banner should keep asunder is intimately bound together by capitalist interest.

Finally, there is also another area in which the most touching harmony of interests rules between the whole Polish and the whole Russian bourgeoisie, where they are of one heart and soul: the jealous guarding of the profits sought in the domestic market from foreign competition. One can encounter in one section of the Western European press the view that the Polish entrepreneurs are greater believers in free trade than the Russian. Nothing could be more mistaken. In the deep conviction that Russian and Polish workers were created solely to produce surplus value for them, Polish and Russian consumers to assist the realization of surplus value, the Russian government to fend off any invasion of foreign competition into this holy Empire – in this conviction the Polish entrepreneurs are just as firm and unshakable as the Russians. When it comes to taking a stand in defense of these “fundamental rights” of the capitalist constitution vis-a-vis the government, then the Lodz and Moscow factory owners, still bearing the bruises they just inflicted on each other, go shoulder to shoulder into battle. In 1888, one year after the two adversaries – as was mentioned – had sent a petition to the government in which they most sharply fought each other on the question of domestic competition, the Moscow entrepreneurs submitted a series of “most humble and obedient” petitions in regard to tariff policy: on increasing the entry tariffs for products of the textile industry, on reimbursing tariffs paid on raw materials when exported by manufacturers to foreign countries, etc. – all demands that had also frequently been made now as well as previously by the Lodz manufacturers. With reason, then, the organ of the large Polish industrialists, in discussing this action by the Moscow entrepreneurs, wrote that while much used to be said about the conflict of interests between the two industrial districts, now this petition shows that there is also a community of interests between the two, and indeed on the most important questions.

The same harmony is evident when it comes to defending the monopoly in profits against the “Germans.” The Moscow factory owners – as was shown – saw in the strong representation of German elements in the Polish bourgeoisie a tempting pretext to lend their calico and fustian interests a becomingly patriotic look in the battle against Lodz. When they called the government to a crusade against the Germans on the Vistula river, they believed that they were striking the Polish bourgeoisie right in the heart. When, however, the government issued its well- known ukase in 1887, and when, because of this ukase, there was talk on many sides of an era of persecution against the Polish bourgeoisie, then it turned out that the Polish bourgeoisie expressed their dissatisfaction on quite unexpected grounds: namely, for them the Russian government’s anti-German measures were not nearly energetic and radical enough. For, as they expressed it, “The government’s decree of two years ago concerning language examinations for foreigners brought about an advantageous change, in that it opened up a sphere of action for native forces...Correspondents from Lodz and inhabitants there have already reported a certain improvement in this situation although it is still far from what it could and should be.”

We have reviewed the many-sided coherence of interests between the Polish and Russian bourgeoisies. The picture that emerges is absolutely different from that which might be gotten under the immediate impression of Lodz and Moscow’s battle cries. On countless, extremely important questions, the Polish and the Russian bourgeoisies are bound together in a solidarity of interests, in particular groups as much as on the whole. What has created this community of interests is, first, the division of labor in production, which in many ways unified the two into a single productive mechanism; second, still more important, the common tariff borders, which breed solidarity against the outside and merge the entire Polish-Russian bourgeosie – from from the standpoint of the market – into a “national” capitalist class. Finally, the common market, which bred the important, reciprocal dependency between Polish production on the one side and Russian transport on the other. And, as is generally known, this fusion of Russian and Polish economic interests advances every day. This is also, in part, a direct result of the general direction of current Russian tariff policy, which in effect closes the way into Russia to not only foreign manufactured goods but also foreign raw materials, and creates domestic raw materials production – in which task it does not shy away from the greatest sacrifices out of the pockets of Russian and Polish consumers and taxpayers.

Forced by prohibitive tariffs, Polish industry is changing gradually from the use of German coke and iron ore over to that of Donets, from American and Indian to central Asian cotton, from Saxon and Silesian to South Russian wool. The reciprocal dependency of Polish and Russian production as a whole grows to the same degree, and the interests of ever newer circles of the Russian bourgeoisie become tied to the weal and woe of Polish industry.

Certainly just as much enmity, competition, and rivalry grow out of these same relations between the Polish and Russian bourgeoisies. The same industrial division of labor, the common tariff boundaries, and the common markets turn the most varied groups within the bourgeoisie into enemies, and every particular solidarity of interests corresponds to a conflict of interests. As the examples have shown us, land ownership opposes industry, production opposes transport, and within each of these groups one district opposes the others and every individual capitalist opposes all the others. But what we glimpse here is a typical picture of capitalist economy, as it puts forth its blossoms in every country. It is the fundamental law of this form of production – bellum omnium contra omnes (a war of all against all) – that is expressed here and that has nothing to do with national contradictions and borders, indeed, on the contrary, ceaselessly wipes away these contradictions and borders within the capitalist class.

Certainly if the conflicts of economic interests coincide with national borders within one and the same state, this creates a broad basis, circumstances permitting, for national aspirations. This can only be the case, however, insofar as the enemy nationalities represent different, inherently antagonistic forms of production; if, for example, one country represents small business, the other large industry, one natural economy, the other money economy. In the given case, however, the situation is totally different, since Poland and Russia have gone through a combined development from a natural to a money economy and from small to large industry. Their antagonism, when and where it comes to light, arises not from the dissimilarity but rather the homogeneity of economic structure, and exhibits the characteristics of all capitalist competitive battles within one and the same economic mechanism.

The competitive Lodz-Moscow dispute is nothing but a fragment of this general war. Superficially puffed up to Poland’s national duel with Russia in the economic battlefield, this dispute in its fundamentals reduces itself to an argument between the Lodz fustian barons and the Moscow calico kings. Following international custom, the two capitalist parties sought first to cover over the trivial cotton object of contention with an ideological national cloak and then to bang the drum as loudly as though their very necks were at stake.

Nonetheless, in reality neither one nor the other party represents the interests of the whole Polish and Russian bourgeoisies – on the contrary, both have countless opponents among their own countrymen. Nor is the fiery competitive battle over domestic markets decisive to or characteristic of the relationship of the disputants. Their rivalry over the domestic markets is contradicted by their solidarity of interests on a whole series of other vital capitalist issues.

In the entire capitalist development of Poland and Russia, which proceeds from an ever stronger bond between the production and exchange of the two countries, the Lodz-Moscow cotton dispute plays an infinitesimally tiny role – if one is not led astray by the behavior of the squabbling entrepreneurs and keeps the wider perspective of the whole capitalist chessboard in view.

Only now, from the basis of these material interests, can the economic policy of the Russian government be evaluated and explained. Russia’s main concern since the 1870s, as is well enough known, is the rearing of capitalism. To this end the prohibitive tariff policy is followed, the hot-house atmosphere of monopoly prices and profits created in the Empire, the costly means of transport built, subsidies and premiums awarded to “needy” capitalists, etc., etc. From this standpoint, the development of capitalism in Poland (just as in other parts of the Empire) appears as partial realization of the government’s own program, its retrogression as a thwarting of this program. But still more important than the Russian government’s own economic designs are the objective tendencies of the Russian economy. The bourgeoisie, reared by the government, already plays a significant role in Russia. The government must now seriously reckon with the bourgeoisie’s interests, but also wants to carry through its own. The interests of the Russian bourgeoisie, however, are – as was shown – interwoven with those of the Polish bourgeoisie in the most diverse ways. There is no point at which Polish industry could be dealt a serious and lasting body blow without at the same time grievously wounding the vital interests of this or that group of the Russian bourgeoisie.

The notion that Russia is destroying or could destroy Polish capitalism assumes that Russian economic policy could be made the exclusive tool of the interests of the handful of Moscow calico manufacturers, an assumption based on a misunderstanding of the nature of the bourgeoisie just as much as of the nature of a capitalist government. Given the splits and contradiction of interests within the capitalist class, the government can represent the interests of the latter only as a whole; it cannot continually take the standpoint of any particular group of the bourgeoisie without being forced away from this standpoint again by the opposition of the other groups. Even the Russian government – although absolute – isno exception to this rule. For even in Russia the bourgeoisie is a political tool of the government only to the extent that the government is the tool of the bourgeoisie’s economic interests. Were the absolutist Russian government to make itself exclusively the lawyer for the Moscow cotton interests and trample on Polish and therefore Russian capitalist interests for this purpose, then it could not help but call forth strong bourgeois opposition to the government in Russia itself. The end result of such a policy could even be efforts by the Russian and Polish bourgeoisies for a reform government that would know how to safeguard their interests as a whole better than the existing regime. Thus, from this side, the question of the future of Polish capitalism is decided: were it to be injured by the Russian government, the government’s efforts would fall to pieces through the violent opposition of the bourgeoisie in Russia and Poland.

From this standpoint we can also reduce the whole question of the alleged persecution of Polish industry to its true value. All the measures that are usually introduced as proof of Russian anti-Polish economic policy have one common characteristic: namely, they are all directed to keeping Polish industry from the use of foreign raw materials and to the purchase of Russian raw materials. This was the case with the differential tariffs on cotton, on coal, on raw iron. All these measures were proclaimed not for the advantage of Russian industries competing with Poland and not with the purpose of destroying Polish industry, but to the advantage of the Russian raw materials production tied to Polish industry and with the purpose of achieving a particular configuration of Polish industry. Precisely the same Russian interests that called forth these measures would form the greatest obstacle to a government policy directed at the destruction of Polish industry.

Yet from the same necessity of satisfying all the so very contradictory interests of the different groups of the bourgeoisie, there arises for the government the necessity of moving in an increasing zig-zag course in its economic policy. All laws of the capitalist method of production are merely “laws of gravity,” i.e., laws that do not move in a straight line on the shortest route, but on the contrary proceed with constant deflections in contrary directions. The government’s general policy of promoting capitalism, correspondingly, can only be realized as it favors now this capitalist faction, now that. The examples of Russian customs and railway policy given above showed crudely the zig-zag course of the Russian government, which at one time protects manufacture at the expense of semi-finished manufacture, at another time takes care of the latter at the expense of the former, at one time patronizes coal mining over iron works, at another time patronizes the iron works at the “coal interests’” expense, favoring sometimes the landowners, sometimes the industrialists. This characteristic of the government’s economic policy also means that it can temporarily and on various questions deeply offend one or another Polish capitalist group; this is not only not impossible, but follows directly, necessarily, from the nature of the situation. The differential railway tariff for grain, etc., was of this type.

However, if all these temporary and one-sided phenomena were torn out of their complicated economic context and puffed up into a doctrine of Russia’s anti-Polish economic conspiracy, then what is involved is a complete lack of perspective and overview of the totality of this policy. In the same way, the exaggeration of the skirmish between Lodz fustian and Moscow calico into a deep gulf between the interests of Polish and Russian capitalism reveals the lack of an overview of the totality of the capitalist community of interest. There can be no doubt that the Moscow district, more than any other, has up until now enjoyed particularly loving care from the government, expressed in gifts of every sort. This policy, however, is merely the concrete expression of the encouragement of Russian capitalism in general, since the central district (where nearly a third of the Empire’s industry and approximately two-thirds the textile industry, by value, is concentrated) forms its main branch. The cost of this favoritism toward the Muscovites has not, however, been borne so much by the other industrial districts of the Empire, which in most cases (for example, the customs policy), on the contrary, also benefit, but much more by the other branches of the economy, above all agriculture. In fact, the enmity between the Russian landowners and the Moscow industrialists is much more lasting and bitter than that between Moscow and Lodz. An interesting spotlight on the alleged “national” policy of the Russian government, on the other hand, is thrown by the well-known fact that the southern coal and iron region which is most coddled and absolutely overwhelmed with patronage – at the expense of the Russian metal industry in the Urals as well as the Moscow industrial interests – is a region whose exploitation is in the main in foreign hands: Belgian and English capitalists.

It is as superficial as it is erroneous to ascribe a national (in the ethnographic sense) “Great Russian” economic policy to the Russian government. Such a policy exists only in the imagination of the reporter led astray by external appearances. In fact, the Czarist government – just as any other in the present day – maintains not a national but a class policy; it differentiates not between Polish and Russian enterprises, but only between those that “establish” or “own” and those that labor.

2.4 Russia's Political Interests in Poland

Although the economic relations between Russia and Poland treated above unquestionably represent the leading feature in the shape of Russia's economic policy toward Poland, it would nevertheless be one-sided to see this policy as determined simply and solely by the interests of the Russian bourgeoisie. For the present, the absolutist government of Russia is more able than that of any other country to carry through its own political interests, its sovereign interests, as well. In this connection, however, the historic state of affairs between the Russian government and Polish industry has formed a unique relationship. It is easy to see that absolutism's interests in terms of Poland are based above all on maintaining and fortifying the annexation. Since the Vienna Congress, Russia's special attention has been directed to tenaciously suppressing all traces of national opposition in Poland, particularly that of the social class which is the pillar of the opposition, the nobility. In this endeavor Russian absolutism saw in Poland's industrial bourgeoisie a desirable ally. To bind Poland to Russia through material interests, and to create a counterweight to the nationalist ferment of the nobility in a capitalist class arisen under the very wing of the Russian eagle, a class disposed toward servility not through any tradition of a national past but through an interest in its future – this was the aim of Russian policy, which it followed with its usual iron consistency. It must be admitted that the Russian government did not err in its choice of means, and that it had correctly sensed the nature of the Polish bourgeoisie. Hardly had manufacture sprouted in Poland, hardly had it tasted the honey of the Russian market, when the Polish entrepreneurs felt themselves ready for their historic mission: to serve as the support in Poland for the Russian annexation. Already in 1826 the Polish Finance Minister Drucki-Lubecki was delegated to St. Petersburg with the most humble entreaty to completely abolish the customs border between Russia and Poland, “since indeed the two countries form one whole and Poland belongs to Russia.” In this declaration, the entire political program of the Polish bourgeoisie was concisely enunciated: the complete renunciation of national freedom in exchange for the mess of pottage of the Russian market. Since that time, the Russian government has never ceased supporting the Polish bourgeoisie. We have cited the long list of laws that have been issued since the 1820s to aid industrial colonization of Poland and the development of manufacture, the “iron fund” for the subsidy of industry, the establishment of the Polish Bank, endowed with every conceivable privilege, etc., etc.

This policy was most energetically maintained in the later period; even in the time of Nicholas I we see the Russian government issue new decrees to the same effect. Nothing was neglected which might transform the noble, rebellious Pole into a capitalist, tame Pole. And the Polish bourgeoisie showed that it possesses a grateful heart, for it has never ceased to thwart and betray national stirrings in Poland with all its might; its disgraceful conduct in the Polish uprisings supplies sufficient evidence of this fact. The most important milestone of this tendency in Russian policy was the abolition of the Russian-Polish customs border in 1851. A historian intimate with the pertinent archives of the Russian government and the best authority on the history of Russian customs tariffs, the Russian Lodyshenki, wrote on this subject:

“The lifting of the customs line between the Empire and the Kingdom was primarily the result of motives of a political character. As is well known, an intellectual ferment of partly national and partly socialist character began in Europe in the 1840s. This ferment, in which the population of Russian Poland also participated, disturbed the Russian government up to a certain point and moved it to seek out ways to unite Poland with Russia as firmly as possible. One of the main factors which hindered the drawing together of the two countries was their economic separation.”

Thus to eliminate this “separation”, to fetter Poland to Russia by the material interests of its bourgeoisie, the customs border was abolished. The Russian government still holds to the same standpoint today, and still greets the growing Polish market in Russia as the chain that most tightly shackles the annexed country to Russia. Thus Mendeleyev wrote in his preface to the official report on Russian industry to the Chicago World's Fair in 1893: “The products of this and many other Polish factories find a constantly growing market all over Russia. Through the competition of this industrial district with the Moscow district, the basic goal of Russia's protectionist policy was achieved on the one hand and, on the other, the assimilation of Poland with Russia, which is appropriate to the peaceable outlook of the Russian people” (read: the Russian government).

This special role that the Polish bourgeoisie plays toward the Russian government as the bulwark of the annexation also is important in explaining the main point under question, i.e., the future of Polish capitalism. It requires, in fact, an enormous dose of naivete to assume that the Russian government, which has given itself precisely the task of cultivating capitalism in Poland and has for more than half a century used all the means at its disposal to do so, now intends to demolish that same capitalism, force the Polish bourgeoisie over to the opposition, and thus wantonly destroy its own handiwork. And indeed, solely out of love for the Moscow entrepreneurs, to whose complaints and lamentations the Russian government has turned a deaf ear for half a century! Unfortunately, the Russian government knows better how to protect its ruling interests. What these interests are in regard to Poland we know from the mouths of its representatives: “the peaceable assimilation” of Poland with Russia, i.e., the strengthening of its rule in Poland at any price. This declaration was made in 1893, long after the presumed new course of Russian policy was supposed to have begun.

The best evidence of our interpretation is provided by the recent history of Russia's relations with Finland. Here we find on a small scale an exact repetition of Russia's earlier policy in Poland. Finland, at present, remains cut off from the Czarist Empire by a customs border and maintains an independent customs policy toward foreign countries much more liberal than Russia's. Finnish industry is now enjoying all the advantages that have already helped Polish industry to blossom. Likewise Finnish products, particularly those of the metal industry, have found access to Russia thanks to, among other things, lower customs at the Russo-Finnish border than at Russia's other borders, and is now giving Russia's domestic industry fierce competition. The Russian entrepreneurs, to whom this is a thorn in the side, have, of course, not neglected to set in motion a “most humble and obedient” campaign to protect the “Fatherland's” industries against “foreign” rivals – exactly like the campaign against Poland. The government has, under this pressure, likewise twice raised the tariffs against Finland as an economically foreign region, because of its independent customs policy, in 1885 and 1897.

If the Russian government were now to make the interests of this or that group of entrepreneurs the consistent plumbline for its economic policy toward the non-Russian-speaking sections of the Empire, then it would consequently have had to continue along the road to cutting Finland off from Russia with a Chinese wall. But precisely the opposite is in fact the case. The government has already ordered the total lifting of the Russian-Finnish customs border for the year 1903 and the absorption of Finland into the imperial Russian customs zone. Thus will the “Fatherland's” industries be freed of uninhibited “foreign” competition. And if this has not happened even sooner, it is not consideration for the lamentations of the Russian mill-owners that is responsible, but the trade agreement with Germany, through which the Czarist Empire has bound itself for a number of years. It is clear that the impending reform means the beginning of the end of Finnish independence in political terms, even if it proceeds first toward demolishing its economic independence. Here we have before us once more a portion of the general policy of Czarism, which passes over all particular interests in order to spiritually level the various parts of the Empire through the system of Russification on the one hand and, on the other, to give the unity of the Empire a firm material frame by this economic welding process, and to press the whole thing together in the iron clamps of absolute power – a policy which we have already become acquainted with in Poland.

Of course not everything in the world goes according to the wishes of the rulers. While the Russian government economically incorporates Poland into the Empire and cultivates capitalism as the “antidote” to national opposition, at the same time it raises up a new social class in Poland – the industrial proletariat – a class that is forced by its situation to become the most serious opponent of the absolutist regime. And if the proletariat's opposition cannot have a national character, so it can under the circumstances be even more effective, in that it will logically answer the solidarity of the Polish and Russian bourgeoisie with the political solidarity of the Polish and Russian proletariat. But this distant consequence of its policy cannot divert the Russian government from its present course; for the time being, it sees in the capitalist development of Poland only the class of the bourgeoisie. As long as Russia seeks to maintain its rule over Poland in this way, the riotous bloom of industry in Poland will remain inscribed in the program of the government. Thus those who await a government policy directed toward the economic separation of Poland take for future phenomena that which belongs to the past, and their insufficient knowledge of history for deeper insight into the future.

2.5 Russia’s Economic Interests in the Orient

Of eminent significance for the question we are dealing with, finally, is the new direction in Russian foreign economic policy that has become evident in the last ten years. Up until that time, Russia’s efforts were directed to satisfying its needs for manufactured goods and raw materials through its own production and emancipating itself from foreign imports. Today its efforts go further; today Russia wants to venture out into the world market and challenge the other capitalist nations on foreign ground. To be sure, this tendency does not stem from the Russian bourgeoisie; because of the peculiar economic-political development of Russia, politics frequently grasps the initiative of economic progress out of its own interests.

While industry in most capitalist countries, to the extent that the boundaries of the internal market are too narrow, pushes the government to acquire new markets by conquest or treaty, in Russia, on the contrary, Czarist policy sees in industrial exports a means of bringing the countries of Asia chosen as political booty into, first, economic dependence on Russia. Therefore, while the Russian industrialists for the most part do not lift a finger to win a place in the world market, the government spurs them incessantly in this direction. Everything has been used to impart energy and a thirst for exports: exhortations, invitations, expeditions to investigate new market areas, the construction of colossal railways such as the Siberian and East Chinese, rebates on customs and taxes on exported goods, finally, direct subsidies to this end. The countries first in consideration here are: China, Persia, Central Asia, and the Balkan states. In 1892 an expedition under the direction of Professor Pozdneev, which was to serve scientific as well as commercial ends, was sent to Mongolia. Even earlier the Russians had introduced the post-wagon system there, which was also run by them. In the following year the official of the Finance Ministry, Tomara, was sent to Persia to investigate the trade situation there and, particularly important, the reconstruction of the Persian port of Enseli was begun in order to support Russian trade. In the same year the Finance Ministry worked out a draft regarding the improvement of the routes from the Russian border to Teheran, Tauris, and Meschhed and the establishment of a Russian bank in Persia. To monopolize the market in East Siberia for its own merchants and knock the English out of the field, Russia decided to abolish the free port on the Amur river and in the port of Vladivostok, which has extended to all goods except those on which an excise had been levied in Russia. However, the most important measure by which the government hoped to give a leg up to Russian trade in Central Asia was the costly construction of the Trans-Caspian Railway.

No less, or more correctly, even more attention did Russia direct toward China. A short time ago China’s trade with foreign countries was taken care of by German, French, and some English banks. Therefore, in 1896, the Russian government hurried to found a Russian bank in Shanghai. “One task of the bank,” wrote the organ of the Russian Finance Ministry at the time, “is to consolidate Russia’s economic influence in China and to thereby create a counterweight to the influence of other European nations. From this standpoint it is particularly important that the bank try to draw as close to the Chinese government as possible, that it collect taxes in China, undertake operations that will bring it into contact with the Chinese treasury, pay interest on the Chinese state debt,” etc. The other Russian measures, for example the construction of the East Chinese railway, are well enough known.

The result of these efforts so far was recently officially examined and has shown itself to be an almost total fiasco. In every country where the government wanted to set it up, the Russian market would have had to overcome stiff competition from German, French, but above all English industry, and the Russian entrepreneurs had not yet shown themselves to have sufficiently grown to the part. Russia was no match for other nations even in its own national territory in East Siberia, as long as it had to face them in free competition. Imports in the most important Siberian port, Vladivostok, amounted to:

		In thousands of rubles
		from Russia		from foreign countries
1887		2,016		3,725
1888		2,121		3,763
1889		2,385		3,325

A consequence of this state of affairs was the above-mentioned decision by Russia to take East Siberia into the Empire’s tariff zone. Russian exports to China are likewise hardly worth mention in comparison to those of other nations. Out of total imports of nearly 330 million rubles, Russia participated with only approximately 4.5 million:

	thousands of rubles
1891	4,896
1892	4,782
1893	4,087
1894	4,488

A similar picture has been provided by the uproar about trade with central Asia. The Trans-Caspian Railway built by Russia, on which such great hopes were set, proved itself to be a really first-rate trade route – for the English, who now have obtained a way of getting around the high transit duty in Afghanistan. Russian exports to the Trans-Caspian, Khiva, Bukhara, and Turkestan have, after a brief upswing, begun to sink again in the last few years. Of the most important articles registered, the following were transported:

	thousands of rubles
Year	1888	1889	1890	1891	1892	1893
Total	1,141	1,296	1,685	2,922	2,102	1,854
Products of textile industry	201	245	541	671	397	538
Sugar	422	457	531	1,048	516	510

English imports from India, on the contrary, grew rapidly during the same period thanks to the Russian railway, as has been officially confirmed from the Russian side. Bukhara, for example, received from the four main stations on this line:

	In thousands of poods
	1888	1889	1890	1891	1892	1893	Total
Russian products	572	1,176	1,863	923	267	244	5,045
English products	1,160	4,209	8,516	12,761	4,443	16,154	47,243

Russia’s exports to Afghanistan are in just as bad a way. Imports of products of the Russian textile industry amounted to 163,245 poods in 1888-1890 (25 months), 10,000 poods in 1893 (12 months), that is, approximately eight times less per year.

Russian trade in Persia has succeeded the best, relatively. Russian cotton products make up approximately 30 per cent of Persian consumption, and imports of these products amount to 48,000 poods per year in 1887-1890, 73,000 poods per year in 18911894.

In the northern provinces of Gilan and Masenderan, the Russian textile industry has almost supplanted the English, but, in total Persian imports, Russia – according to official evidence – plays a very small role for the meantime. This despite the fact that the Russian industry finds itself in the most advantageous situation, since the Persians and Armenians living in the Caucasus, carrying on trade at their own risk, serve Russian industry as the most suitable agents, while the merchants of other nations must take recourse to business on commission, and that only in Persia’s larger cities.

The total picture of Russia’s exports to its most important Asian markets looks as follows:

1894		In millions of rubles
		to Persia	to China	to Central Asia
Total		12	4.5	3.8
Food		7.5	0.1	1.7
Manufactured goods		3.5	3.4	0.4
Raw materials and half-finished goods		—	0.7	0.9

We see that the Russian government’s program in Asia is still far from being realized, and that, in any case, the result attained corresponds in no way to the amount of effort made in this direction. It would be an error to trace this back to the technological backwardness of Russian industry alone. Certainly Russia is behind other industrial states in this regard, in a whole series of important branches of industry – such as the metal and wool industries, etc. – and in order to be able to take up the competitive battle successfully on the world market it would have to unconditionally improve its methods of production. But there is a further and no less important factor involved, which has largely frustrated the government’s plans in Asia up until now. For even where Russian industry could have easily won a victory over the English, according to the competent testimony of individual researchers and even the British consuls in Persia – for example, in the production of lower grades of cotton cloth – the Russian industrialists up until now have not been able to go very far.

The reason is the entire habitat of the Russian and especially the Moscow entrepreneurs, which was formed by years of Russia’s prohibitive tariff policy. Pampered by the government with all sorts of gifts and patronage, spoiled by enormous monopoly profits, spoiled further by a colossal domestic market and the immunity from outside competition, the Moscow entrepreneurs felt neither the desire nor the need to expose themselves to the rough weather of the world market and content themselves with normal profits. It is, so to speak, profit-hypertrophy which makes the Muscovites so sluggish and apathetic in the search for possible new markets; they see foreign trade as, at most, a means to either pocket higher export subsidies or to get a huckster’s one-time profit by fraudulent goods deliveries and the clumsiest cheating. If neither the one nor the other is in the offing, then the Moscow manufacturer answers the orders that might pour in from outside with stubborn silence.

This method of doing business is clearly shown in connection with Asia. Thus, for example, the Russian calico massively imported to Bukhara and Khiva in 1890 and 1891 was manufactured in such a way that the Moslems could have used it much less for clothing than for dyeing New Year’s eggs. In subsequent years the population understandably turned back to English products, and this, more than the cholera epidemic and the bad harvest, brought about the precipitous fall in Russian imports in the years 1892 and 1893. Just as telling is the story of the sugar trade with Asia. So long as the excise was rebated on the export of sugar, these exports went rapidly to Persia and Bukhara; when the rebates were suspended, the business once more seemed pointless to the Russians, and exports sank suddenly from 1,047,996 poods in 1891 to 516,021 poods in 1892 and 150,128 in 1893. Another interesting side of the Muscovites’ commercial spirit is revealed in their trade with Siberia, where they managed to first send out travelers with samples to win orders, then afterwards declined to fill these orders. Finally, the Muscovites’ energy comes to the fore most glaringly in their business with China; approached from there with requests for the establishment of trade relations, they retorted to this importunate demand with silence.

After exhaustive examination of the outcome of Russia’s Asiatic trade, the organ of the Finance Ministry likewise came to the following conclusion: “The characteristic traits of the non-commercial Slavic (meaning here: Russian) race and the absolute apathy and indolence of the Moscow entrepreneurs are expressed as crudely as they are completely in our trade with Central Asia.” The causes of the failure of the Russian market in Asia are formulated in almost the same words by other papers of different viewpoints – the Novosti, Novoe Vremya, St. Petersburg News, among others. And recently the organ of the Finance Ministry happened to speak once again on the same theme: “Only Persia,” it wrote in January 1897, “can be called a market for the products of our cotton industry; the attempts to conquer the Chinese and Central Asian markets for ourselves can so far not be viewed as successful, and what is responsible is in part our inability to adjust to the demands and customs of the customers, but above all the fact that our entrepreneurs at the moment have it too good at home to want to bother with foreign markets.”

Thus it appears that the very essence of the Moscow entrepreneurs, and particularly their efforts to maintain a privileged place by means of a totally artificial Chinese wall, are incompatible with the current tendency of Russian foreign policy and in fact go directly against it. It is clear that the most effective remedy for all Moscow’s indolence and its trade practices, as well as for technological backwardness, would be Russia’s transition to a liberal tariff policy, which would tear the Moscow district out of the hot-house atmosphere of monopoly and confront it with foreign competition in its own country. To us there is little doubt that the interests of absolutism in Asia on the one side, on the other the expansion of capitalist agriculture and the interests of the landowners, will sooner or later pull Russia down the road to a more moderate tariff policy. But above all a remedy can be created only in one way, namely by sharpening competition within the Russian customs borders, i.e., so that Moscow is ruthlessly abandoned to the unlimited competition of the progressive industrial districts of Poland and St. Petersburg. This viewpoint is also that which the more influential Russian press, such as the Novoe Vremya, stressed explicitly in connection with the debate over the Czarist Empire’s interests in Asia. That the government, for its part, is now in fact preparing to do away with Moscow’s economic rut and to force the Muscovites toward modern production and trade methods is best proved by the most recent law on the maximum work day, which indicates the most abrupt break with Moscow’s present methods of production, while it also appears as a realization of the Polish project of 1892.

To the same degree to which Moscow’s economic conservatism is a drag on current Russian policy and becomes more so every day, Polish industry appears once more as Czarism’s comrade in arms. We have shown by the comparison between the competitive conditions of Polish and central Russian production how far ahead of Moscow Poland is in terms of technology. For this reason alone, capitalist Poland, as the most progressive industrial district in Russia, which, through competition, unceasingly spurs the others, particularly Moscow, toward technological improvements, realizes the Russian government’s current program. But the Polish industrialists are also running ahead of the Russians specifically in the opening up of Asian markets. We have seen how seriously and thoroughly they prepared themselves for this task. Without awaiting the invitation of the government, they themselves seize the initiative and with their own hands forge trade links with foreign countries.

In the only country where Russian trade is relatively flourishing – in Persia – the products of the Polish textile industry make up nearly half of the total textile imports from Russia – approximately 40 per cent of the imports via the most important junction, Baku. To Poland also belong the initiatives toward trade relations with Persia, in many respects: already in 1887, thus before the government had turned its attention to this country, Poland had set about opening up its own trade agency and warehouse in Teheran. Lodz also immediately made use of the Trans-Caspian Railway to advance into Central Asia with its goods along with St. Petersburg and Moscow. It is the Warsaw district that provides the largely immigrant strata of the populations of Bukhara and Turkestan with glassware, faience, and porcelain, while the inferior Moscow products are bought by the poorer natives. Lodz is, at this point, the only industrial district in the Empire whose textile industry’s products have found entry into Constantinople and the Balkan countries. Already in 1887 Poland had taken up trade relations with Rumania and Bulgaria. Recently Lodz began to send cotton products directly to Sofia. Indeed, the Polish bourgeoisie, through use of the Siberian railway line, may make Warsaw the center of the new, large European-Asian trade routes. “The British manufacturer,” wrote the English consul in Warsaw, “may be prepared to find in them (the Polish entrepreneurs) formidable rivals in the markets of the East.”

In this way Polish capitalism in Asia works directly into the hands of Czarist policy.

From these so diametrically opposed attitudes of Moscow and Poland toward the aims fixed by Russian policy, there also follows a totally different current in the public opinion of the two districts. Stronger and stronger grows the party favoring domestic free trade, favoring technological progress, the party that opposes the official guardianship and defense of backward industries, and therefore is sympathetic toward the Polish district; and the Moscow entrepreneurs stand more and more isolated with their ancestral belief in the Trinity: guarantees, bonuses, subsidies. The anti-Moscow temper clearly expressed itself on the occasion of Moscow’s petition to the 1893 annual fair in Nizhni-Novgorod for the imposition of a tax on Polish traveling agents. Thus we read in Novosti:

“During the same fair ... these same representatives of protectionism composed and sent to the Finance Minister a petition regarding a special tax on the traveling salesmen of the Lodz factories, with the unconcealed intention of liberating the Moscow industrial district from Lodz’s competition. According to healthy common sense, the Moscow manufacturers should, in the interests of Russian industry and of Russian consumers, merely follow the admirable example of the Lodz manufacturers and employ traveling salesmen, bring the producers closer to the consumers, and so cheapen and make easier the market for its own products. But not nearly so much entrepreneurial spirit lies with the customs and habits of these protection-coddled practical men; they prefer to try various pranks against their competitors.”

And, finally, a characteristic excerpt from the official government organ Warsaw Tagesblatt on the general tasks of Russia’s industrial foreign policy:

“With the opening up of these new markets in Central Asia and Persia, we reckon on the flourishing of our industries, and we repeat that it is very much to be deplored that the lion’s share of the profits go to foreign countries, while only the crumbs remain for our poor workers (!). Our trade with Central Asia and Persia has not yet struck deep roots, and the representatives of Russian trade still have many victories to win over English competition to conquer those markets for Russia. In view of the common enemy, the Moscow and Polish entrepreneurs should join forces in order to strive together toward the same goal ... Russia’s main goal in the Asian market is at this moment to exclude English goods. It would be a subsidiary question which of the Empire’s industrial districts contributes more to the achievement of this goal, if only the profits of industry on the banks of the Vistula went exclusively to the native population and not, as is the case, to increase the capital for German entrepreneurs, employees, and workers. Were those industries in the hands of Russia or Poland, then we would be far stronger in our battle with England, and our dominance in central Asia would be secured.”

Understandably, the government organ does not neglect to deal a blow in passing to the German industrialists, who are heavily represented in Polish industry; it charges them with ignoring Russian national interests, exclusive, egotistical concern for the “German” interests of their own pockets, etc. But in the main, we find here the actual situation of the moment, pointedly expressed: In view of the present tasks in the world market, the domestic rivalries of the Polish and Russian entrepreneurs stand completely in the background. Insofar as differences exist between them, the blame will be pushed onto the Germans, an element hated just as much by the Polish bourgeoisie, as we have seen. Polish industry in itself, its development, its flourishing, appear here in a new light, as lying directly in the interests of the Czarist government: Once it has served to additionally consolidate the Russian conquest in Poland, Czarism is now assigning Polish capitalism the flattering role of serving in Asia as the harbinger of Czarism’s coming appetite for conquest. Indeed, Poland now plays the leading role, as we saw, in the realization of this lofty task, while Moscow’s star, i.e., the special Muscovite economic policy, is slowly waning. The new Russian law on the maximum work day signifies that even in the Russian Empire the lovely days of Aranjuez – the days of primitive capitalist accumulation – are almost past.

Conclusion

Our task is finished. We believe that we can conclude from the foregoing that all apprehensions about the future of Polish industry – at least insofar as they relate to the danger threatened by the Russian government – are quite groundless and nothing but an uncritical, superficial reflection of the intimate entrepreneurial wrangle between the Lodz and Moscow entrepreneurs. If one looks deeper into the situation, one must arrive at the conclusion that Poland, in economic terms, not only does not have any separation from Russia in store, but, rather, the tendencies arising from the general internal nature of large-scale capitalist production itself are binding Poland much more strongly to Russia with every passing year. It is an immanent law of the capitalist method of production that it strives to materially bind together the most distant places, little by little, to make them economically dependent on each other, and eventually transform the entire world into one firmly joined productive mechanism. This tendency, of course, works most strongly within one and the same state, within the same political and tariff borders. The capitalist development of Poland and Russia has yielded this result. As long as both countries were predominantly agricultural and indeed natural-economy countries, thus until the 1860s, they remained economically foreign to each other and each represented for itself a closed whole with particular economic interests. Since factory production began here and there on a larger scale, however, since natural economy gave way to money economy, since industry became a determining factor in the social life of both countries, the self-containment of their material existence has more and more disappeared. Exchange and the division of labor have strung thousands of threads between Russia and Poland, and these manifold economic interests are so intertwined that the Polish and Russian economies today form more and more one complicated mechanism.

The process portrayed above is mirrored in many different ways in the consciousness of the different factors in Polish public life. The Russian government sees Poland as a tool for its plans for rule, believes that Poland has been unconditionally surrendered up to its power and that it has founded a thousand-year empire of despotism. The Polish bourgeoisie sees in this a fundamental of its own class rule in the country and an inexhaustible source of riches; it indulges in the sweetest dreams of the future in its thoughts about Asia and believes itself able to build a thousand-year empire of capital. The various nationalist elements of Polish society perceive the entire social process as a unique, great national misfortune, which mercilessly shattered their hopes for the reconstruction of an independent Polish state. They sense instinctively the power of the economic bonds which capitalism has created between Poland and Russia and, without being able to hold back the fatal process in reality, they can at least put an end to it in their own imagination; they cling in desperation to this illusion and expect the Russian government itself to nullify Poland’s hated capitalist development with its own hands and so recreate a basis for nationalism.

We believe that the Russian government, the Polish bourgeoisie, and the Polish nationalists have all equally been struck with blindness, and that the capitalist fusion process between Poland and Russia also has an important dialectical side that they have completely overlooked. This process is bringing to fruition in its own womb the moment when the development of capitalism in Russia will be thrown into contradiction with the absolute form of government, and when Czarist rule will be brought down by its own works. Sooner or later, the hour will strike when the same Polish and Russian bourgeoisie which is today pampered by the Czarist government will become weary of their political attorney – Absolutism – and will checkmate the king. Moreover, this capitalist process is moving with impetuous haste toward the moment when the development of the productive forces in the Russian Empire becomes irreconcilable with the rule of capital and when, in the place of private commodity economy, a new social order based on planned, cooperative production will appear. The Polish and Russian bourgeoisies are hastening this moment with their combined forces; they cannot make one step forward without increasing and pushing forward the Polish and Russian working classes. The capitalist fusing of Poland and Russia is engendering as its end result that which has been overlooked to the same degree by the Russian government, the Polish bourgeoisie, and the Polish nationalists: the union of Polish and Russian proletariats as the future receiver in the bankruptcy of, first, the rule of Russian Czarism, and then the rule of Polish-Russian capital.